KPMG Study Shows 3 in 4 Companies Worldwide Unprepared for ESG Audits
In preparation for upcoming environmental, social, and governance (ESG) regulations set to roll out globally, a recent report by KPMG revealed that a staggering 75% of companies worldwide are not adequately prepared for external audits of their ESG data. These regulations, scheduled for implementation during the 2024 reporting season in the European Union, the United States, and globally, are intended to replace voluntary practices among listed companies regarding climate-related disclosures. External auditing of sustainability-related data is deemed crucial by regulators to provide investors with accurate information, free from misleading claims, known as greenwashing. Under these new rules, ESG disclosures will be subject to external audits, ensuring reliability and transparency in reporting. Among 750 surveyed companies, only 25% feel sufficiently prepared for these impending changes, highlighting a significant industry-wide challenge. Larger companies demonstrate better preparedness than smaller counterparts, according to the report. Moreover, the study also noted disparities among nations, with France, Japan, and the United States being better prepared, while Brazil and China ranked lower in readiness for the new ESG regulations.