- 95% of Irish companies surveyed by KPMG are reporting on sustainability, which is in line with the global average (96%). However, only 58% issue Ireland-specific reports, with the remainder forming part of their global company reports.
- Despite potential risk of greenwashing accusations, only 37% have external assurance by independent third parties, significantly lagging on global average of almost-half (47%).
- 86% of Irish reports include carbon reduction targets, with 62% aligned to the Paris Agreement targets. However, only 5% reference Ireland’s national targets.
KPMG has released its Survey of Sustainability Reporting for 2022. The report analyses the largest 100 companies (N100 companies[i]) in 58 countries, territories, and jurisdictions. The share of Irish N100 companies reporting on sustainability (95%) is now on par with the global average (96%). This is an increase from 78% in 2020. The increased reporting results from regulatory changes, investor pressure, and market maturity.
Sustainability reports are published by companies to provide information to stakeholders such as investors, employees and supply chain to make disclosures on sustainability matters affecting their organisations. Historically this has been largely voluntary, but sustainability reporting is increasing rapidly and expected to become on par with financial reporting in line with new regulations such as Sustainable Finance Disclosures Regulation (SFDR), Corporate Sustainability Reporting Directive (CSRD) and the EU Taxonomy.
Only 58% of companies issue Ireland-specific reports, which will become mandatory when the CSRD comes into effect at the beginning of 2024. The share of Irish companies being assured by independent parties has increased from 32% in 2020 to 37% in 2022. This however still lags the global average of 47%. Independent assurance of reports will also become mandatory in 2024 when the CSRD takes effect.
The trends in carbon emission target setting are positive, with 86% of Irish reports including carbon reduction targets, with 62% aligned to the Paris Agreement targets that aims to limit average global temperature increase to 2 degrees Celsius. Only 5% of targets specifically reference Ireland’s national targets, likely as they were only published for 2021, aligning Ireland with the EU target of reaching climate neutrality by 2050. Nearly a third of companies’ targets are not linked to any other (national or global) targets.
Slightly above half (52%) of the reports surveyed identify climate change as a risk to their operations, quantification of the financial impacts of these risks is required to fully understand business-related climate risks, while 23% of Irish companies reporting on sustainability identify biodiversity as a potential risk to their operations, almost half of the global average.
Conor Holland, Principal, ESG Reporting at KPMG in Ireland said, “Previously the scope of sustainability reporting was very narrow, with only very large public companies needing to file. There has been a lot of progress made by Irish companies to date, but with the CSRD coming in 2024, which is only 13 months away, their sustainability credentials will soon face unprecedented levels of scrutiny. From 2024, a much larger pool of Irish companies will be required to report, and these reports will need to contain a far higher level of detail in addition to being independently assured. Reports will also have to be Ireland specific - a report issued from a group headquarters elsewhere will no longer be enough.”
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If you have any queries on the finding of our survey, please contact Conor Holland of our ESG team. We'd be delighted to hear from you.
Principal, ESG Reporting & Assurance
KPMG in Ireland
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