A Wall Street Journal Pro Survey has found that almost two-thirds of businesses are reporting ESG information, up from 56% the previous year.
However, respondents highlighted three fundamental types of data as their three biggest environmental reporting challenges: energy management, greenhouse gas emissions and climate change risk.
There was also little consensus on which framework to use, with nearly a quarter of respondents saying they rely on more than one framework. The five main frameworks used were: the United Nations’ Sustainable Development Goals reporting guidelines (44%), the Global Reporting Initiative (40%), Task Force on Climate-Related Financial Disclosures (40%), the CDP system (34%) and the new International Sustainability Standards Board rules (33%). Six percent said they don’t yet report, but plan to, while another 7% don’t plan to.
The study noted that mandatory disclosure requirements might help in streamlining standards and reports.
The proportion of companies disclosing sustainability and ESG information has also increased, up to 63% from 56% last year.
Those that don’t yet report this data but plan to was 16%, down from 25% last year. About one-fifth of respondents said their organization had no plans to report their progress, virtually unchanged from last year. Breaking that down, a quarter of private companies don’t plan any ESG reporting, while only 7% of public companies felt the same.
Public companies expressed greater difficulty with reporting because listed firms face more stringent reporting requirements and pressure from investors. These demands will only increase as mandatory climate reporting comes into effect.
They also cited Scope 3 emissions as the most challenging emissions to calculate and report.
“Scope 3 emissions are by definition outside of a company’s direct control, making them nearly impossible to measure and difficult to even estimate,” said Maria Ghazal, the Business Roundtable’s Senior Vice President of corporate governance.