ESG Complexity is a Challenge: 74% of respondents expect to be required to comply with two or more global regulations.
Executives and Employees Suffer From Disconnect: 62% of executives strongly agree their companies apply the same diligence to ESG reporting as they do to financial reporting. However, only 32% of managers have the same perspective.
Disconnect With IT Team: Only 41% of organizations inviolve their IT/technology teams in ESG reporting.
PotentialBusiness Value: 90% of respondents agree that in the next two years, having a strong ESG reporting program will give their organizations a competitive advantage.
Technology is key to unlocking value in ESG: 97% agree that access to technology and data will play an essential role in making decisions to advance their ESG strategies in the future.
ESG Reporting: Biggest Challenges
Moreover, the eight biggest challenges associated with ESG reporting involved:
Measuring quantitative initiatives (e.g., diversity, equity and inclusion): 40%
Complying with ESG frameworks and standards: 39%
Compiling data from multiple sources: 39%
Measuring specific issues (e.g., GHG Emissions): 38%
Validating data for auditing and assurance: 47%
Complying with regulation: 33%
Communicating progress to stakeholders: 25%
Not having the right technology in place: 19%
To tackle that reporting complexity, 74% of survey participants said their companies have appointed at least one employee to oversee ESG reporting and initiatives, up 6% over the previous year. Still, the figure varies by region. Europe leads the way (79%), followed by North America (73%) and APAC (69%).
Nine Potential Business Benefits
And the biggest potential business benefits associated with ESG reporting include:
The survey was developed with Alex Edmans, professor of finance at London Business School. The actual survey was conducted in July 2023 by Ascend2 in collaboration with Workiva. Participants included 926 professionals from teams typically involved in ESG reporting, including executive leadership, finance and accounting, ESG operations, internal audit and risk management, and legal.
Respondents spanned nine global markets, including the United States, Canada, the United Kingdom, Germany, France, the Netherlands, Australia, Japan and Singapore. All respondents represented companies with at least $250 million in annual recurring revenue, and nearly half (45%) came from companies with $1 billion or more.
ESG Reporting: Software and Consulting Partner Opportunities
ESG has emerged as an important and sometimes polarizing topic in U.S. politics, but ESG regulations across the United States and Europe are driving a "generational opportunity," Workiva CEO Julie Iskow said during an August 2023 earnings call with Wall Street analysts. Moreover, Workiva partners increasingly influence ESG software sales, Iskow added.
Among the anecdotes Iskow mentioned:
A Big Four advisory firm is deploying Workiva's ESG and GRC solutions for a a multinational telecom company based in Europe.
A regional advisory firm and a climate accounting software partner influenced a Fortune 500 provider of food facilities to purchase Workiva's ESG software.
An ERP technology partner and Workiva won a deal with a top 20 US city. A regional consulting partner also influenced the deal, and will be implementing the project.
A regional advisory firm sourced a win with a Top 15 insurance company.
A technology consulting partner sourced a six-figure win with a building products manufacturer.
Workiva Amplify 2023: So what's next? It's safe to expect more generative AI and ESG software updates at the Workiva Amplify 2023 conference, which is scheduled for September 19-21 in Nashville, Tennessee.