Australia’s top companies outperforming global peers on sustainability reporting, but now the hard work begins.
Ninety-seven percent of Australia’s top companies continue to provide sustainability reporting, and are generally outperforming global peers, with a steep improvement in climate reporting since 2020.
- 90 percent of ASX100 companies recognise climate as a financial risk
- 20 percent more (now 89 percent) are reporting carbon targets
- 74 percent are now reporting against TCFD, which is above global peer G250* of 61 percent
- Reporting of ‘social’ risks to the business is now up to 90 percent which is 40 percent above global peer G250.
* The G250 companies are the largest 250 companies by revenue based on the Fortune 500 rankings. Just over two-thirds are from China (30%), the US (28%) and Japan (10%).
The study finds a significant and welcome increase both in quantity and quality of climate reporting by the ASX100. The great majority are now detailing material risks and reporting specific carbon targets.
There has been a substantial improvement from two years ago, which shows that even in the absence of public policy directives, Australian companies are taking the initiative and meeting the demands from their stakeholders, such as investors and regulators. The setting of targets is the first critical step.
The next step, which is much harder, is implementing the strategies to achieve them.
Key Australian highlights
The status of sustainability reporting within the ASX100, shows just how Australian companies compare to the rest of the world. The level and quality of sustainability disclosures has improved in Australia. In particular, Australia has caught up to the globe on reporting the financial risks associated with climate change and setting carbon targets. Australia still has some way to go in the areas of sustainability leadership and biodiversity.
Key trends in sustainability reporting
A call to action
New ESG requirements are driving a different perspective and set of conversations in boardrooms, causing business leaders to stretch their thinking and ensure that from the top down they are making strategic decisions that take climate and broader ESG considerations more into account.
The pressure on businesses to report on non-financial metrics is only expected to grow as regulations evolve.
Businesses need to invest in sustainability reporting by:
- understanding stakeholder expectations
- using materiality assessments to focus the content of sustainability reporting
- aligning reporting to mandatory or voluntary frameworks
- investing in quality non-financial data management
- understanding the impact of climate change and social issues on business
Australian Sustainability Reporting Trends update | December 2023
Global Survey of Sustainability Reporting
First published in 1993, the KPMG Survey of Sustainability Reporting is produced every 2 years and this year’s edition provides analysis of the sustainability and Environment, Social and Governance (ESG) reporting from 5,800 companies across 58 countries and jurisdictions. The findings released show that there is still a disconnect between the urgency of addressing climate change and social equity, and the ‘hard results’ provided by businesses.
This Global report and Australian statistics on our website are intended for corporate reporting, investor relations and sustainability professionals who want to understand the standards set by the leaders. While also helping board directors, investors, lenders, asset managers and rating agencies assess the standard of sustainability reporting and where improvement is required.
The survey’s aim is to support those who have a responsibility for assessing and preparing their own organisation’s sustainability by focusing on:
- Key global trends in sustainability reporting
- Reporting on the risks of biodiversity loss
- Reporting on climate-related risk and carbon reduction
- Reporting on the UN Sustainable Development Goals (SDGs)
- Materiality (new)
- ESG risks and governance (new).
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Sustainability Reporting – KPMG can help
If you’d like to discuss the findings or need assistance with your reporting, please contact us.
