Sustainability is the new normal for largest companies

• 95% of world’s top 250 companies now publishing carbon targets (2022: 80%)
• More than half (56%) of the top 250 companies now have a sustainability leader (2022: 45%)
• Almost one third (30%) of top 100 companies consider sustainability in leadership pay (2022: 24%)

With mandatory sustainability reporting nearly upon us in the EU, new research from KPMG reveals the world’s biggest companies are taking a proactive approach, with a significant increase in businesses already publishing ESG data, including carbon reduction targets.

First launched in 1993, the KPMG Survey of Sustainability Reporting is produced every two years, providing analysis of the sustainability and ESG reports from 5,800 companies across 58 countries and jurisdictions, including Romania. With more than 180,000 items of data combined into a single dataset, the report offers a truly comprehensive review of current progress on ESG reporting by the world’s biggest businesses. The analysis includes data on ‘N100s’ – the world’s top 100 companies and the ‘G250’ – the world’s 250 largest companies by revenue based on the 2023 Fortune 500 rankings.

The data for Romania showed that out of the 100 companies analysed, 78 published sustainability information either in a standalone report, or as part of their management report. Compared to the previous survey conducted in 2022 there was a four percentage point increase in the number of reporting companies.

Of the 78 companies, 30 publish a local report, an increase of 43% compared to the previous survey. Among the 30 companies that publish a local report, 8 are local entities, again an increase of 33% in local reporting companies since 2022.

In terms of reporting standards, GRI remains the preferred choice, with 93% of the local companies analysed using it, and 47% also using SASB standards. Among the companies analysed, one had published its first CSRD report.

In our previous analysis we also presented details of Romanian companies’ climate change concerns. We found then that 18 companies had set greenhouse gas emission targets. In the latest survey, the number has increased to 22, of which 10 are also reporting in line with TCFD recommendations. One of the most significant increases (267 per cent) was seen in relation to the inclusion of sustainability-related KPIs in the remuneration packages of top management.

There has been a significant increase in third party assurance, which will continue to rise for reports published from 2025 onwards. Compared to the previous survey, in which only 8 companies carried out some form of audit, this time 13 out of the 30 companies publishing a local report audited either the whole report or specific chapters and/or KPIs.

One other observation was that not all companies included their Taxonomy chapter in the Sustainability Report. Only 70% of local companies published their EU Taxonomy analysis, while 37% of companies declared that they had started preparing for CSRD implementation by conducting a Double Materiality Analysis.

Corina Constantin, Associate Partner Advisory – Energy, Sustainability and Climate change, KPMG in Romania, says: “The current landscape of sustainability reporting is evolving towards greater standardization, regulatory compliance, data quality, and stakeholder engagement. Sustainability reporting is increasingly becoming a cornerstone of corporate strategy, driven by rising stakeholder expectations, regulatory mandates, and the global urgency to address environmental and social issues. Key trends so far have included the adoption of standardized reporting frameworks like GRI, SASB, and TCFD. However, for Europe, the focus will have to shift as most local companies will have to start preparing for CSRD implementation.

The trends observed in the market underscore the growing recognition that sustainable business practices are not only essential to address global challenges but also to drive long-term economic success and resilience.”

The findings of KPMG’s Survey of Sustainability Reporting 2024 indicate six major trends:

1. Reporting on sustainability and setting carbon targets has become part of business as usual. Both sustainability reporting and carbon targets have been adopted by almost all of the G250 global group of companies and four-fifths of the N100 groups.
2. Some companies have already changed practices in advance of the move to mandatory reporting on sustainability under the EU’s Corporate Sustainability Reporting Directive (CSRD) standards. The directive applies to an initial group of companies for reports on financial years ending from 31 December 2024, with some having until 2029 to publish their first compliant reports. However, some companies, mainly European-headquartered or with activities in Europe, are already preparing for CSRD such as by reporting material topics in accordance with the European Sustainability Reporting Standards (ESRS). Nearly half of European companies in the research already make disclosures using the EU Taxonomy.
3. Double materiality, required under CSRD, is now used by half of the largest companies. Nearly four-fifths of both the G250 and N100 groups use materiality assessments. The larger G250 companies are more likely to use double materiality processes that assess both impacts on society and the environment and how this affects their financial performance. Double materiality is the most complete form of materiality assessment and is a cornerstone of compliance with the EU’s CSRD, so some of those adopting it are likely to be doing so to prepare for it becoming mandatory.
4. Despite moves towards mandatory reporting, voluntary guidelines and standards remain widely-used. GRI remains the most popular standard, with three-quarters of G250 companies using it and nearly as high a proportion of the N100 groups. There have been bigger increases in use for both SASB and stock exchange guidelines over the last two years, although from lower bases. Their adoption varies significantly by country and region, with all surveyed companies in Saudi Arabia using its stock exchange guidelines and two-thirds of those in the Americas using SASB.
5. Reporting on biodiversity continues to increase. Around half of both the G250 and N100 groups now report on biodiversity, up from around one-quarter four years ago, although growth has been slower in the last two years. 
6. Adoption of TCFD recommendations continues to rise. Nearly three-quarters of G250 companies report climate risks in line with TCFD.

Roxana Suciu, Director Advisory – Energy, Sustainability and Climate Change, KPMG in Romania, says: “Based on this study, we can observe an improvement on all sustainability aspects that were included in the analysis. So it would be safe to assume that companies will have a strong foundation for preparing their future reports, the requirements of which are becoming increasingly complex.

The significant increase in the adoption of sustainability related KPIs linked to board remuneration, for example, which is a well-established method of driving sustainable business transformation, suggests that companies are increasingly recognising the role that sustainability can play in business performance.

Going forward, companies will need to invest in robust reporting frameworks, data management systems, and transparency practices to meet stakeholders’ expectations and manage the risks and opportunities associated with sustainability.”

The world is facing complex climate, social and geopolitical issues and addressing ESG priorities is more important than ever. The last two years have seen some companies and investors weakening and, in some cases, abandoning ESG commitments. However, KPMG’s Survey of Sustainability Reporting shows that the largest companies worldwide are engaged with at least some elements of its agenda, such as, by setting carbon reduction targets.

John McCalla-Leacy, Head of Global ESG at KPMG International, said: “KPMG’s findings – and the fact that there are more sustainability leaders within executive teams at the boardroom than ever before – are clear evidence that we’re making solid progress on the journey toward greater transparency and positive corporate actions to address environmental, societal and governance challenges. An increasing number of today’s investors are now taking non-financial data just as seriously as financial data. The mainstream view today is that businesses that measure and report ESG risks – clearly and in-depth – are also likely to manage these risks better and deliver greater long-term value.

2025 is slated to be a milestone year for sustainability reporting. The Survey of Sustainability Reporting shows that companies are addressing the challenges and getting ahead of the new rules and regulatory frameworks. We are making noticeable progress with ESG reporting in a way that supports short-term and long-term business objectives. With years of analysis on the books, we are building an evidence base which shows how a robust sustainability reporting ecosystem helps businesses not only measure progress on executing their ESG strategy, but also drives value while mobilizing capital markets to help support the development of ever-increasing much-needed solutions to the many environmental and societal issues we face. The business world is making progress. Let’s keep going.”

ESG provides insights into the long-term sustainability of a business, but despite some clear progress over the past few years in climate-related reporting, more needs to be done, particularly on the S and G. Companies continue to find it challenging to strike a balance in sustainability reporting, between a slant towards positive reporting of progress, and qualitative descriptions of impact on the environment, society and the business itself. Companies must find a way to consistently highlight and address both their positive and negative impacts.

Jan-Hendrik Gnändiger, Head of Global ESG Advisory at KPMG International, commented: “Our research shows that sustainability reporting has become part of business as usual for almost all of the world’s largest 250 companies and a large majority of the top 100 companies in each country, territory or jurisdiction. The last two years have also seen significant increases in the proportion of companies publishing carbon reduction targets to levels equivalent to those for sustainability reporting. While next year will see some companies having to report on sustainability, our research shows that many others are commencing or increasing their work in this area voluntarily. There are excellent reasons to do so, whether to prepare for mandatory requirements or to offer better information to investors, customers, employees, regulators or other stakeholders.”