Environmental, Social and Governance (ESG) reporting is becoming mainstream as increasing numbers of companies undertake structured assessments of the non-financial impacts of their activities. The European Sustainability Reporting Standards (ESRS), which are part of the European Union’s Corporate Sustainability Reporting Directive (CSRD), have introduced several new requirements including double materiality, a wider scope of disclosure and limited assurance. In their efforts to disclose hundreds of metrics and targets, companies in the first wave of reporting have to access and process appropriate information and set up a groupwide ESG reporting organization.
The European Commission’s Omnibus package of proposals, published in February with the aim of simplifying sustainability reporting and due diligence obligations, has added a degree of uncertainty. Under these proposals, only large companies with more than 1,000 employees would be in scope of the CSRD and therefore required to report under ESRS. In April, EU member states agreed to the so-called ’Stop the clock’ proposal, postponing for two years mandatory ESRS reporting for second and third-wave companies. To determine reactions to the Omnibus proposal, KPMG has surveyed 128 companies from 17 countries with a particular focus on Germany. In this report, we summarize the results of this research, examine specific impacts and make recommendations for companies and leaders planning their next steps on ESG reporting.
