KPMG recently published a global sustainability reporting survey. Norway, Iceland, Sweden, Estonia and Finland, as KPMG’s member firms, also participated in the study. In collaboration, we will write a three-part blog series in which we analyse the results of the report from the perspective of the Nordic and Baltic regions. Welcome to read and discuss. If you have any questions, please don’t hesitate to reach us.

What is ESG risk?

Economic risks have long been factored into company’s operations and reporting. With the increasing recognition that the economy sits inside society and the environment and that ecological crisis loom in times of increasing inequality, investors are demanding that environmental, social, and governance (ESG) risks also be reported on. These ESG risks can include climate, biodiversity, and other environmental, social, and governance risks. 

Why is reporting on these risks important?

While there is a growing societal understanding of the impacts companies can have on the environment, the impacts these changes can have on the business itself are less clear. Global supply chains can further heighten or complicate exposure to these environmental risks as well as introduce further social and reputational risks such as human rights issues. Poor governance can exacerbate these issues. It is critical for investors to have transparent insight into these risks so money can flow towards investments which can lead to greater sustainable development, supporting the UN SDGs.

ESG risks can have financial impacts on businesses in various ways. For instance, the increase in consumers demanding sustainable and/or verified products puts pressure on those that are not innovating in line with these demands. Furthermore, employees are increasingly pushing for better working conditions and are focusing more on mental health issues to be addressed proactively by their employers. In addition, employees are looking for meaningful work which increasingly involve working for companies that are perceived to be sustainable. Thus, businesses may loose out on attracting and retaining best talent.

By going through risk identification and mitigation processes, such as those suggested by the Task Force on Climate-related Financial Disclosures (TCFD) or Taskforce on Nature-related Financial Disclosures (TNFD), and understanding what ESG risks are most material to their business, companies can reduce their exposure to both financial and non-financial risks. These risks can be significant, where for example, the World Economic Forum has estimated that more than half of the global economy is either moderately or highly dependent on biodiversity, and where the World Bank has estimated failure to address climate risk could reduce the value of institutional investors by as much as 10% by 2040.

ESG Risk reporting in the Nordics/Baltics

In KPMG’s survey of sustainability reporting, it was found that across the Nordic and Baltics (Sweden, Norway, Iceland, Finland, and Estonia), these risks are being disclosed by the largest corporations in each of these countries at varying rates, as can be seen in the table. Across the board, Sweden saw the highest rates of disclosure compared to the other countries. Norway and Finland perform similarly as do Iceland and Estonia, who are furthest behind their Nordic colleagues. Finland, however, saw less temporal improvement in terms of reporting rates as compared to the other countries (Estonia was not surveyed in 2020).

By risk category, climate change is the most reported on risk in almost all countries (with the exception of Estonia) and biodiversity is the least reported on risk category in every country. These results can be expected as pressure to address and respond to climate change has been growing. It can also be connected to TCFD´s has been established for a longer time than other frameworks such as the TNFD. However, it is also expected that reporting on biodiversity risks will increase and improve going into the future. This expectation is based on the growing awareness of the links between biodiversity loss and climate change, with one amplifying the other. Furthermore, biodiversity loss is defined by the Rockström Institute as one of two core planetary boundaries out of nine in total that has the ability to push the Earth system into a completely unprecedented state. As such, authorities, investors, and other stakeholders are expected to increasingly look towards biodiversity as a key risk going forward.

Reporting on social and governance risks seemed to go close to hand in hand across countries, where it is likely those companies which most effectively mapped their material ESG risks were able to identify social and governance risks together, while environmental risks tend to have their own frameworks for reporting.

Percent of companies that disclosed on specified risk. The percentages in parenthesis highlight the changes in reporting from KPMG’s 2020 Survey on Sustainability Reporting












29% (+3%)

57% (+4%)




10% (+10%)

27% (+17%)




45% (+12%)

62% (+14%)




48% (12%)

72% (+12%)



The road forward

Moving forward it is imperative that the Nordic and Baltic countries increase ESG risk disclosures and assurance of the information provided. As the European Union continues to strengthen environmental and sustainability policy, it will be important for this region, which has varying levels of EU membership, to not just keep pace with legislation but act as leaders in the field of ESG risk disclosures. This is particularly true regarding increasing regulatory action against greenwashing in the Nordics and Baltics by authorities further heightening these risks. If the Nordics are going to continue to been seen as leaders in the sustainability movement globally with high levels of renewable energy, awareness of sustainability, and strong social welfare systems, but they must continue to take the next step in addressing and reporting on ESG risks such as climate, biodiversity, social and human right issues, and governance, to ensure continued prosperity and movement towards a sustainable future.

Download the report

Learn more about KPMG‘s Global Sustainability Reporting survey here.

If you want to hear more about the topic, register for our webinar Sustainability reporting through Nordic and Baltic lenses! (November 3).


Anne-Julie Jøssang
Senior Sustainability Manager
KPMG Norway

Kevin Dillman
Sustainability Manager
KPMG Iceland 


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Tomas Otterström
Corporate Sustainability & Sustainable Finance, Advisory Partner
KPMG Finland