Over three-quarters of executives in the US have observed significant or moderate progress toward their sustainability goals in the past year according to Deloitte’s 2024 “Sustainability Action Report”. Also, 51% of respondents identified greater efficiencies, reduced risk, and enhanced stakeholder trust as the top internal benefits of investing in sustainability reporting.
Deloitte commissioned an online survey in January 2024 of 300 executives at publicly owned companies in the US with a minimum annual revenue requirement of $500 million or more. The survey highlights their approach to integrating environmental, social, and governance (ESG) measures. It reveals that mandatory reporting requirements are driving many companies to incorporate sustainability into strategic planning, risk management, and data governance.
The top business outcome anticipated from enhanced ESG reporting is improved brand reputation (20%), followed by enhanced talent attraction and retention (15%), and the ability to command pricing premiums (14%). These findings underscore the multifaceted value of high-quality sustainability reporting, from operational efficiencies to stakeholder trust.
Nearly all respondents (99%) are preparing for potential increases in sustainability requirements, with 77% creating new roles and responsibilities in response. More than half (52%) have established cross-functional ESG councils or working groups, a slight decrease from 57% in December 2022, indicating many organisations have already implemented these governance mechanisms. Companies with established ESG groups were more likely to make significant progress on their sustainability goals (38%) compared to those without (10%).
As companies enhance their capacity for sustainability reporting, many are gaining a deeper understanding of the complexities and challenges, particularly with data quality. More than half of the respondents (57%) cited data quality as their top challenge and 88% reported it as one of their top three challenges. Similarly, 81% identified documentation and sign-off as a major challenge.
Seventy-four percent of respondents are currently prepared to disclose Scope 1 greenhouse gas (GHG) emissions, up from 61% in December 2022 and 58% in March 2022. However, sectors like consumer products (52%) and oil and gas (48%) report being the least prepared for the disclosure. Only 15% of respondents are currently preparing and disclosing Scope 3 GHG emissions, with top challenges including a lack of confidence in vendor data (64%) and inconsistent industry standards and methodologies (50%).