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1、KPMG.Make the Difference.The journey continues:Navigating the road to readinessKPMG ESG Assurance Maturity Index 2024 KPMG I KPMG.Make the Difference.ForewordThe environmental,social and governance(ESG)agenda is rapidly moving forward,with new rules coming into force that oblige companies to report

2、on their ESG risks,opportunities,and performance.To make this reporting credible,disclosures will require independent third party assurance.Mike Shannon Global Head of ESG AssuranceKPMG InternationalLarry BradleyGlobal Head of AuditKPMG InternationalIt was against this backdrop that,last year,we pub

3、lished the inaugural KPMG ESG Assurance Maturity Index.The Index found that companies had a long way to go to prepare for ESG reporting and assurance.So,how are they doing now?Our second year of analysis shows that some progress has been made but nevertheless,many organizations are still in the earl

4、y stages of readiness.The time has come for a concerted focus on putting in place the necessary systems,processes and controls to gather the data required,and aim to ensure these are sufficiently robust to stand up to external assurance.In a real sense,the clock has started to tick.In the intervenin

5、g time since we published the inaugural Index last year,the EUs European Sustainability Reporting Standards(ESRS)have been finalized and published with the first sustainability reports due to appear in early 2025.The International Sustainability Standards Board(ISSB)has also published its standards,

6、and these are set to be implemented locally in jurisdictions around the world.Given the standards are so new,and in some cases still evolving,companies may find themselves on a steep learning curve and potentially face challenges in collecting and verifying their ESG data.As a result,it may be more

7、common to see qualified assurance opinions in the early years.While regulatory requirements are driving the urgency for businesses to gather their data and get assurance-ready,there are expected benefits beyond mere compliance.Stakeholders from investors to customers and employees want a clear pictu

8、re of what companies are doing to operate on a more sustainable basis.The organizations that can present robust,accurate information free from suspicions of greenwashing have an opportunity to derive a competitive and reputational advantage.KPMG professionals are supporting organizations on this jou

9、rney.We have channeled considerable investment into helping ensure that our ESG assurance work is performed to the same consistent level of rigor and quality as our financial statement audits and is delivered through our same advanced audit technology platform,KPMG Clara.For us,ESG assurance is not

10、an add-on it is an integrated part of what we do.We hope our second ESG Assurance Maturity Index will bring valuable insights to companies as they prepare for ESG reporting and assurance,as well as to the wider ecosystem of stakeholders who are taking an ever-keener interest in all matters ESG.Forew

11、ordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance imperative03 Expected benefits of ESG assurance increase as companies progress along the journey04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become read

12、y for ESG assurance revisitedContact us 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.2|The journey continues:Navigating the road to readinessForewordKPMG surveyed senior executives and board memb

13、ers with ESG reporting and assurance knowledge at 1000 companies across industries,global regions,with a mean revenue of US$18.9 billion.The KPMG ESG Assurance Maturity Index is composed of five pillars designed to help companies measure progress in each of these areas:(1)governance,(2)skills,(3)dat

14、a management,(4)digital technology,and(5)value chain.Each pillar is supported by one or more questions from the survey.The scores from each question within a pillar were averaged to arrive at the overall score for the pillar.The pillar scores were then weighted as follows:About the IndexThe Index,me

15、asured on a basis of 0100,examines the progress companies have made in these areas to gauge the relative maturity of a companys ESG reporting program in order to assess its assurance readiness.Based on their rankings,companies are classified as Leaders(the top 25th percentile)Advancers(the next 50th

16、 percentile)Beginners(the bottom 25th percentile)Research was conducted between February April 2024.Governance 0.25 Skills 0.25Data management 0.25 Digital technology 0.15 Value chain 0.10ForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance impera

17、tive03 Expected benefits of ESG assurance increase as companies progress along the journey04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedContact us 3|The journey continues:Navigating the road to readiness 2024 Copyr

18、ight owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.About the IndexContentsESG assurance:The journey continuesThe rising ESG assurance imperativeExpected benefits of ESG assurance increase as companies progress a

19、long the journeyChallenges slowing down progress in preparing for ESG assuranceFive steps to help you become ready for ESG assurance revisitedExecutive summary060510131619ForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance imperative03 Expected b

20、enefits of ESG assurance increase as companies progress along the journey04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedContact us 4|The journey continues:Navigating the road to readiness 2024 Copyright owned by one

21、 or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Executive summaryFive steps to help you become ready for ESG assuranceDetermine applicable ESG standardsBuild robust ESG governance and develop the right skillsIdentify the appl

22、icable ESG disclosures and data requirements across functionsDigitize ESG data processes and strive to ensure high quality dataWork with the value chain to collect ESG information12345Leaders top business benefitsDecreased costs 63%Greater market share 62%Reduced legal and regulatory interventions 5

23、5%Stronger reputation 54%Firms that must now report ESG data or will soon be required to do so:vs2024 75%2023 66%Beginners who say it is challenging to balance ESG assurance goals with shareholder profit expectations:vs2024 65%2023 55%Firms that have the ESG policies,skills,and systems in place to b

24、e ready for ESG assurance:vs2024 29%2023 25%Leaders who now place robust,product-specific requirements on their suppliers:vs2024 42%2023 28%Leaders who see digital tools as being key to being ready to obtain assurance:vs2024 46%2023 65%Companies with clear audit trail to support their non-financial

25、information:vs2024 29%2023 26%ForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance imperative03 Expected benefits of ESG assurance increase as companies progress along the journey04 Challenges slowing down progress in preparing for ESG assurance05

26、 Five steps to help you become ready for ESG assurance revisitedContact us 5|The journey continues:Navigating the road to readiness 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Executive summaryE

27、SG assurance:The journey continues01 ForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance imperative03 Expected benefits of ESG assurance increase as companies progress along the journey04 Challenges slowing down progress in preparing for ESG assu

28、rance05 Five steps to help you become ready for ESG assurance revisitedContact us 6|The journey continues:Navigating the road to readiness 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.01 ESG assu

29、rance:The journey continues01 Governanceof companies surveyed are in the early stages of ESG maturity and therefore,less ready for ESG assurance71%The KPMG ESG Assurance Maturity Index 2024(“the Index”)found that the majority of companies are still near the beginning of their ESG assurance journey a

30、nd therefore are not ready to have all of their data independently assured.In 2023,we classified 25 percent of companies as Leaders who had relatively speaking made progress in terms of the systems,controls and policies needed to gather robust ESG data for assurance;that percentage has now increased

31、,albeit modestly to 29 percent.This is not surprising given the regulatory environment continues to evolve.Positively,not only has the percentage of companies in the Leader category grown,but the average score of those Leaders has also increased with a 3.4 percent rise from 64.8 to 67.0.The average

32、score for the middle cohort of companies Advancers has also risen,by 1 percent from 45.4 to 45.9.However,the Beginner group has lost ground,with the average maturity score falling by 5.3 percent,from 30.5 to 28.9.Given that we are now a year closer to mandatory regulatory requirements for ESG report

33、ing in the EU,and some international jurisdictions,this drop is a concern.While there is still time to make up ground,Beginner companies are reaching the point where concerted action is needed.The task ahead,especially for those in the EU is significant and will require considerable resources.Figure

34、 1.Average maturity index score by ownership Consistent with last year,the Index also reveals that the higher a companys revenue,the more likely it is to be advanced in its ESG assurance preparations.The average score for companies with revenues of over$10bn is 55.1,significantly higher than the sco

35、re for those with revenues between$5 and$10bn(45.65)or under$5bn(39.3).At the largest companies with revenues of over$100bn,the score peaks at 69.5.Not surprisingly,publicly traded companies displayed higher ESG maturity than privately held ones,with scores of 49.5 and 44.7.Publicly traded48.349.520

36、242023Privately held43.344.7ForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance imperative03 Expected benefits of ESG assurance increase as companies progress along the journey04 Challenges slowing down progress in preparing for ESG assurance05 F

37、ive steps to help you become ready for ESG assurance revisitedContact us 7|The journey continues:Navigating the road to readiness 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.01 ESG assurance:The

38、 journey continuesFigure 3.Average maturity index score by industryLast year the Index revealed only moderate differences in ESG maturity between industries,and this is true again in 2024 although there have been some notable movements.In 2023,it was Energy&Natural Resources that topped the scores w

39、ith 50.7 but this year Insurance has leapt to number one position with an 11 percent rise to 52.8.Banking comes in just behind in second position,with a 7 percent increase to 52.1.The Infrastructure sector has the lowest score,at 43.2.Where a company is headquartered has an impact on their ESG assur

40、ance readiness.As in 2023,France tops the scores(52.4),while Germany has moved up strongly to second place with a 15 percent increase to 52.3.Similar to last year,companies in Japan perform well with a score of 50.2.Other major jurisdictions US,Canada and UK are not far behind,with the UK score risi

41、ng 11 percent.While China scored lowest(40.5)with a 6 percent drop from last year.This could be due to the fact that an increased awareness in stakeholder expectations is driving a higher awareness in the work they need to do.By region,it is North America that achieves the highest rating(49.4).Altho

42、ugh a number of European countries perform strongly,Europe is second at 48.8.This is largely because the Index this year includes over 200 companies based in Spain and Ireland and maturity there is relatively low,bringing the overall score for Europe down.Excluding Spain and Ireland to compare on a

43、like-for-like basis with last year,the score for Europe would have risen from 46.8 to 50.0.With the EUs Corporate Sustainability Reporting Directive(CSRD)now in force and effective from 1 January 2024,certain large companies with listed securities on EU-regulated markets and with more than 500 emplo

44、yees must publish ESG data in line with the European Sustainability Reporting Standards(ESRS)from early 2025.The clock is ticking for these companies to meet the requirements.Figure 2.Average maturity index score by stage2024Energy andnatural resourcesManufacturingWealth,asset management and real es

45、tateInsurance52.847.5Banking52.148.850.749.5Consumer and retail47.749.249.149.2Telecomm44.648.1Tech44.647.147.046.9Lifesciences and health42.444.3Infrastructure46.043.22023AllLeaderAdvancerBeginner2024202347.646.567.064.845.9 45.428.930.5ForewordAbout the IndexExecutive summary01 ESG assurance:The j

46、ourney continues02 The rising ESG assurance imperative03 Expected benefits of ESG assurance increase as companies progress along the journey04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedContact us 8|The journey con

47、tinues:Navigating the road to readiness 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.01 ESG assurance:The journey continuesFigure 4.Average maturity index score by headquarters countryFigure 5.Ma

48、turity score by headquarters region49.448.348.845.643.946.845.843.1North AmericaEuropeAsia PacificLatin America2024202320242023France52.450.4Germany52.345.3Japan50.2 50.0UK49.944.9US49.5 49.4Canada49.246.9Ireland46.6Australia46.044.5Spain45.4Netherlands45.447.5Brazil43.143.9China40.543.0Note:Spain a

49、nd Ireland were not part of the 2023 Index and therefore have no year over year comparative data.ForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance imperative03 Expected benefits of ESG assurance increase as companies progress along the journey0

50、4 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedContact us 9|The journey continues:Navigating the road to readiness 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities pr

51、ovide no services to clients.All rights reserved.01 ESG assurance:The journey continuesThe rising ESG assurance imperative02 ForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues03 Expected benefits of ESG assurance increase as companies progress along the journey04 Challeng

52、es slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedContact us 10|The journey continues:Navigating the road to readiness 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no

53、services to clients.All rights reserved.02 The rising ESG assurance imperativeThree-quarters of business leaders surveyed said their companies must report ESG data now,up from two-thirds in 2023.Over the next 1-2 years,nearly every business leader expects to be required to report.99.7%The primary ca

54、talyst prompting businesses to disclose their ESG data is regulation.As ESG reporting requirements in regions such as the EU,US,and other jurisdictions draw near,an increasing number of companies find themselves obligated to report.Regulation is the most common driver cited by survey respondents,and

55、 is up from a year ago(70 percent versus 64 percent).However,regulation is by no means the only driver.This years Index reveals that pressure is growing on companies across a number of fronts.Stakeholder activists are cited by 57 percent of executives,up from 49 percent,while investors and financial

56、 markets have both increased compared to last year,both cited by 48 percent of respondents.Increased frequency of reportingEighty-five percent of executives say that their organization reports ESG data at least annually.Amongst Leaders,a quarter(26 percent)report it half yearly while nearly one in t

57、en(8 percent)report ESG data every quarter.A third of Leaders(35percent)say they report data throughout the year(half yearly,quarterly,monthly).By contrast,a third of Beginners(32 percent)say that ESG data is not reported externally at all at this time.The most common format(34 percent of companies)

58、is to report in a standalone sustainability or ESG report,while a third(44 percent)report their information in a separate section of the annual report.A fifth(22 percent)produce an integrated annual report that discloses detailed ESG strategy and information.Across Leaders,Advancers and Beginners,th

59、e figures are up for separate ESG reports,indicating this is the current direction of travel,at least for now.“The main impetus for companies to share their ESG information in a more transparent and credible manner stems from meeting the growing expectations from many different stakeholder groups.Le

60、aders see the value and the potential business benefits of it done well,it helps create a competitive edge.”Patrick Chu,Head of ESG Reporting and Assurance,KPMG ChinaForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues03 Expected benefits of ESG assurance increase as compan

61、ies progress along the journey04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedContact us 11|The journey continues:Navigating the road to readiness 2024 Copyright owned by one or more of the KPMG International entitie

62、s.KPMG International entities provide no services to clients.All rights reserved.02 The rising ESG assurance imperative“Producing ESG data more frequently is helpful because you can both accelerate your ESG reporting and assurance timeline as well as evaluate progress and adjust ESG performance thro

63、ughout the year.Establishing a reporting strategy that addresses both internal and external reporting mediums will be key to complying with regulation and generating value from your ESG reporting.”Maura Hodge,Sustainability Reporting and Assurance Leader,KPMG in the US“The interactions and combinati

64、ons between financial and non-financial information are going to steadily increase in a more connected ecosystem,providing greater transparency.”Sebastian Soares,Head of Assurance Brazil and South America,KPMG in BrazilESG assurance gaining momentum With regards to ESG assurance,nearly two-thirds(63

65、 percent)of organizations obtain limited assurance over some or all of their disclosures,while just over half(52 percent)receive reasonable assurance over some or all.However,this reasonable assurance is often over a very small number of critical KPIs.These limited and reasonable assurance figures h

66、ave both increased from last year(50 percent and 47 percent respectively).Just nine percent of respondents do not obtain any external assurance currently.In terms of who carries out ESG assurance,in 42 percent of cases it is the firms financial auditor(up from 34 percent last year),while the same pr

67、oportion use a different audit firm(down from 46 percent).Amongst Leaders,the highest percentage use their financial auditor(44percent)while 41 percent use a different audit firm and 15 percent use another independent external assurance provider.It is worth noting that in some jurisdictions such as

68、Australia,proposed legislation(for the introduction of the International Sustainability Standards Board(ISSB)standards)would make it mandatory to use the financial statement auditor for assurance of ESG information.It will be interesting to see whether this becomes the prevailing pattern across othe

69、r jurisdictions.ForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues03 Expected benefits of ESG assurance increase as companies progress along the journey04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assuran

70、ce revisitedContact us 12|The journey continues:Navigating the road to readiness 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.02 The rising ESG assurance imperativeExpected benefits of ESG assura

71、nce increase as companies progress along the journey03 ForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance imperative04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisi

72、tedContact us 13|The journey continues:Navigating the road to readiness 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.03 Expected benefits of ESG assurance increase as companies progress along the

73、 journeyLeaders see more expected benefits than Beginners,and the gap is wideningLast year,we noted a wide range of potential benefits from obtaining ESG assurance beyond mere tick-box compliance,with respondents flagging greater market share,improved profitability and better decision making among t

74、he chief upsides.These factors continue to feature this year and indeed,the expected benefits are increasing the further companies progress in their ESG assurance journey.Increasing returns for LeadersThis is especially evident when we look at the feedback from Leaders.Also noticeable is a widening

75、gap between Leaders and Beginners.For example,there is a 30 ppts delta between Beginners and Leaders when it comes to expecting to see decreased costs.Beginners are experiencing fewer benefits across the board an incentive,if any were needed given the regulatory imperatives,to accelerate progress an

76、d move further ahead.There are some wrinkles in the findings,however,that suggest the expected benefits do not all come in a straight line.For example,this year,only 45 percent of Leaders say they expect to see increased profitability(through market share gains,increased efficiencies,resource optimi

77、zation,waste reduction,etc.),down from 54 percent in 2023.One explanation for this may be that it takes more time than envisaged for the financial benefits to hit the bottom line,especially in these early days when ESG reporting is still largely voluntary.Figure 6.Biggest percentage-point increases

78、in reported benefits for Leaders,2024 over 2023677788111218Greater market shareIncreased customer satisfactionImproved talent attractionStronger reputationImproved employee engagementBetter corporate credit ratingReduced business risksBetter product and service qualityDecreased costsForewordAbout th

79、e IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance imperative04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedContact us 14|The journey continues:Navigating the road to readiness

80、 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.03 Expected benefits of ESG assurance increase as companies progress along the journeyAligning ESG with business strategyTo realize the potential ben

81、efits,it is critical that there are clear actions taken and are integrated into business operations in order to achieve ESG targets.This is an area where Leaders clearly understand that meaningful reporting reflects real results and is an area of improvement for Advancers and Beginners.Eighty-six pe

82、rcent of Leaders have set and broken down ESG targets into all or most operational functions,this falls to 54 percent of Advancers and just 7 percent of Beginners.The over-riding message is clear:preparing for the rigor of the ESG assurance process can bring multiple expected business benefits.The d

83、iscipline needed helps organizations produce higher quality data and information,identify areas where processes can be improved,and realize efficiencies.At the same time,being in a position to publish high-quality,credible ESG information helps reduce the risk of allegations of greenwashing and make

84、s the business potentially more attractive to investors,customers and other stakeholders,helping to boost reputation and increase engagement and sales.“Regulation is a key driver but this whole topic is in fact market-driven as ever wider numbers of stakeholders demand robust ESG information.If busi

85、nesses respond in the right way,they will likely be rewarded in the long run.Dont look at this as a compliance exercise,but as a platform for better engagement.”Neil Morris,Global Head of ESG Assurance Methodology,KPMG InternationalForewordAbout the IndexExecutive summary01 ESG assurance:The journey

86、 continues02 The rising ESG assurance imperative04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedContact us 15|The journey continues:Navigating the road to readiness 2024 Copyright owned by one or more of the KPMG Int

87、ernational entities.KPMG International entities provide no services to clients.All rights reserved.03 Expected benefits of ESG assurance increase as companies progress along the journeyChallenges slowing down progress in preparing for ESG assurance 04ForewordAbout the IndexExecutive summary01 ESG as

88、surance:The journey continues02 The rising ESG assurance imperative03 Expected benefits of ESG assurance increase as companies progress along the journey05 Five steps to help you become ready for ESG assurance revisitedContact us 16|The journey continues:Navigating the road to readiness 2024 Copyrig

89、ht owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.04 Challenges slowing down progress in preparing for ESG assuranceSkills and resources are seen as the biggest challenge as the size of the task has become cleare

90、rWhen our research was conducted for last years survey,April June 2023,key standards such as the ESRSs and ISSB S1 and S2 had not yet been published and the exact demands were therefore unknown,even if the general shape of the coming requirements was understood.Now that the standards have been publi

91、shed,there is clarity over exactly what is needed and this has brought the challenges more fully into focus.Most companies are still a long way off readiness.A range of stumbling blocksBut what are the chief obstacles in the road?It is instructive here to look at Beginners as they are most likely to

92、 be grappling with blockers to progression.Doing so,a standout challenge is evident:a lack of internal skills and expertise,cited by 61 percent of respondents.This ranks significantly higher than any other challenge.01 GovernanceFigure 7.Challenges bigger for Beginners than Leaders Lack of internal

93、skills and expertise Insufficient IT/digital solutions Cost of compliance/little available funding No internal champion and team Complexity of reporting requirements Inconsistent reporting standards Beginner61%48%41%23%47%38%Leader32%22%21%10%36%28%Diff.-29 ppt-26 ppt-20 ppt-13 ppt-11 ppt-10 pptFore

94、wordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance imperative03 Expected benefits of ESG assurance increase as companies progress along the journey05 Five steps to help you become ready for ESG assurance revisitedContact us 17|The journey continues:

95、Navigating the road to readiness 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.04 Challenges slowing down progress in preparing for ESG assuranceWhile digital and IT solutions remain a significant

96、 challenge,there are signs of encouragement.This year,68 percent of firms overall and 76 percent of Beginners say they capture Scope 1 and 2 emissions data a key requirement in ESG reporting which is an increase from 55 percent and 56 percent respectively in 2023.For Scope 3,the percentages are lowe

97、r,however,they have also increased to 51 percent of all firms and 37 percent of Beginners,from 36 percent and 28 percent last year.Examining perceptions of the challenges also helps us see how and where Leaders are making progress.There are big falls year over year in those rating costs as a barrier

98、(from 35 percent down to 21 percent),IT/digital solutions(from 30 percent to 22 percent)and metrics/measurement tools(43 percent to 34 percent).People and skills top of mindLooking across all groups combined,the biggest single challenge is the lack of internal skills and expertise(44 percent).We see

99、 the race for talent intensifying as companies compete to find and secure highly specialized skillsets from a limited talent pool,all at the same time.Over half of companies(54 percent)say they are planning to hire externally as a result and indeed amongst Leaders the proportion is higher still,at 5

100、9 percent.This suggests that as businesses progress further in the process,they realize they will need more skills to fully achieve maturity in ESG reporting and assurance.The people challenge is closely followed by inadequate supplier performance(43 percent).Indeed,for Leaders this is their biggest

101、 barrier(46 percent)a sign that involving the supply chain in ESG reporting is a key part of the task,and not surprising,also one of the hardest.We will discuss this in more detail towards the end of the report.“It is actually encouraging to see that companies are becoming more aware of the challeng

102、es of getting ready for ESG assurance.Clients are appreciating the value of assurance more too.These are positive signs as organizations gear up.”Tomokazu Sekiguchi,Head of Department of Professional Practice-Disclosure,KPMG in JapanForewordAbout the IndexExecutive summary01 ESG assurance:The journe

103、y continues02 The rising ESG assurance imperative03 Expected benefits of ESG assurance increase as companies progress along the journey05 Five steps to help you become ready for ESG assurance revisitedContact us 18|The journey continues:Navigating the road to readiness 2024 Copyright owned by one or

104、 more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.04 Challenges slowing down progress in preparing for ESG assurance01 GovernanceFive steps to help you become ready for ESG assurance revisited05ForewordAbout the IndexExecutive sum

105、mary01 ESG assurance:The journey continues02 The rising ESG assurance imperative03 Expected benefits of ESG assurance increase as companies progress along the journey04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedCo

106、ntact us 19|The journey continues:Navigating the road to readiness 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.05 Five steps to help you become ready for ESG assurance revisited01 GovernanceIn o

107、ur 2023 report,we outlined five key steps to help businesses prepare for ESG assurance.These steps still stand,even if more organizations have now moved further along the journey.Determine applicable ESG standardsBuild robust ESG governance and develop the right skillsIdentify the applicable ESG dis

108、closures and data requirements across functionsDigitize ESG data processes and ensure high quality dataWork with the value chain to collect ESG information112345By now,many companies are aware of incoming reporting requirements though still discovering what compliance will look like.The three key in

109、coming frameworks are:the European Sustainability Reporting Standards(ESRS)published by the EU and applicable to businesses operating in that region the S1 and S2 standards published by the International Sustainability Standards Board(ISSB).Jurisdictions including Brazil,Costa Rica,Sri Lanka,Nigeria

110、 and Turkey have already announced decisions to adopt or otherwise use the ISSB Standards.Other countries such as Canada,Japan and Singapore are working on how the ISSB requirements will be incorporated into local reporting.the final rule from the US Securities and Exchange Commission(SEC)that will

111、apply to businesses with a US listing,although the SEC stayed the climate rule in April 2024 pending judicial review.Timing:The ESRSs apply for certain large companies listed in the EU from the year commencing 1 January 2024,meaning that the first mandatory reports will be due from early 2025.The re

112、quirements are then phased in for other large or listed businesses.The timing of adoption of the ISSB standards will be determined by each jurisdiction with Turkey and Brazil being among the first to set out their mandatory adoption timetable(starting from 2024 and 2026 respectively,with first Deter

113、mine applicable ESG standardsreporting in 2025 and 2027).Subject to the stay,the SEC requirements will first apply for large accelerated filers for fiscal years beginning in calendar year 2025.Assurance:The CSRD has a staggered or laddered approach whereby reporters can start with having limited ass

114、urance but,must move to reasonable assurance later.For the ISSB standards,the assurance requirements will again be stipulated at a jurisdictional level.For example,Brazil has adopted a migration plan from limited to reasonable assurance that is similar to the CSRD regime.Absent the stay,assurance is

115、 required under the SEC rule for Scope 1 and 2 GHG emissions,while certain disclosures are subject to audit.ForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance imperative03 Expected benefits of ESG assurance increase as companies progress along t

116、he journey04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedContact us 20|The journey continues:Navigating the road to readiness 2024 Copyright owned by one or more of the KPMG International entities.KPMG International

117、 entities provide no services to clients.All rights reserved.05 Five steps to help you become ready for ESG assurance revisited01 GovernanceCorporate Sustainability Reporting Directive(CSRD)Based on the EU companies*included within our Index,30 percent feel ready for independent ESG assurance under

118、the CSRD.However,the average maturity index score for these companies is just 48.6,indicating that there is still a lot of work to do considering the fast-approaching deadlines.Under CSRD large,listed EU companies will start reporting from 2024,with other large companies starting in 2025.Listed SMEs

119、,that will choose to opt out for two years,and non-EU companies with substantial business in the EU will be phased in with all required to report starting 2028.In the first wave,CSRD mandates companies obtain limited assurance over their reporting,with a CSRD limited assurance standard expected in 2

120、026.It is anticipated to be based on the forthcoming international sustainability assurance standard(ISSA 5000),with the Committee of European Auditing Oversight Bodies(CEAOB)considering whether specific add-ons and possible carve-outs are required.Until the CSRD standard is in place,EU countries ca

121、n adopt national standards or guidance,with a number already having done so.The CEAOB is working on non-binding,high-level guidelines on the procedures to be performed by auditors or independent assurance service providers.Eventually the European Commission will likely consider the appropriateness o

122、f moving to reasonable assurance and,if appropriate,adopt reasonable assurance standards by October 2028.*Based on company respondents from France,Germany,Ireland,Netherlands,and Spain(n=380).Survey conducted February-April 2024.ForewordAbout the IndexExecutive summary01 ESG assurance:The journey co

123、ntinues02 The rising ESG assurance imperative03 Expected benefits of ESG assurance increase as companies progress along the journey04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedContact us 21|The journey continues:N

124、avigating the road to readiness 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.05 Five steps to help you become ready for ESG assurance revisited01 Governance2Governance starts at the top and Board

125、 and CEO engagement is critical to ensure that data and processes are robust and ready for ESG assurance.To help ensure best results,Boards should make ESG matters a standing agenda item.They will want to follow the example of boards in ESG Leaders,which typically meet throughout the year to assess

126、the impact of ESG on business value,identify ESG opportunities and risks,monitor ESG performance,review ESG reports,and take ESG actions.Getting the boards active participation in ESG matters can help organizations accelerate their ESG assurance efforts and overcome barriers impeding their plans.Bui

127、ld robust ESG governance and develop the right skillsFigure 8.How often the board discusses ESG matters22%4%53%21%1%1%23%73%2%9%2%44%44%1%BimonthlyMonthlyQuarterlyOnce a yearNot discussedat Board levelLeaderBeginnerAllForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 T

128、he rising ESG assurance imperative03 Expected benefits of ESG assurance increase as companies progress along the journey04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedContact us 22|The journey continues:Navigating t

129、he road to readiness 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.05 Five steps to help you become ready for ESG assurance revisited01 GovernanceBoards shaping up to a continuing journeyWe would

130、certainly urge that Boards do not lose their focus on ESG,despite the wider economic and financial challenges of the times.The ESG agenda should remain a priority,essential to maintaining a positive market reputation and attracting the best people to the organization.Since 2023,Boards in Leader comp

131、anies have taken on more responsibilities in three key ESG areas:(1)determining the impact of ESG on business value,(2)identifying ESG risks,and(3)taking ESG actions.But respondents dont believe their boards are as focused on reviewing ESG reporting and monitoring results as they were last year.Begi

132、nners on the other hand report a lower level of Board responsibility for most ESG activities than they did in 2023.These include reviewing ESG reporting,taking ESG actions,monitoring performance,determining the impact of ESG on business value,and taking responsibility for ESG actions.The only area o

133、f board responsibility that did not drop year on year for Beginners is identification of risks and opportunities.As our research indicates,there is more to do in terms of Boards awareness and understanding of ESG assurance and related issues.A year ago,34 percent of respondents agreed that their Boa

134、rd of Directors was knowledgeable about the ESG assurance issues facing the organization and that figure is static this year(33 percent).The proportion of respondents who agree that ESG transparency is a top priority for the C-Suite is also unchanged at 27 percent(itself quite low).Over the coming m

135、onths and years,these percentages need to show an uplift if organizations are truly to get to grips with the demands of ESG assurance and the priority it requires.90%72%87%85%87%86%79%83%76%85%Determiningimpact of ESGon businessvalueIdentificationof risks andopportunitiesTaking ESGactionsReviewingES

136、G reportingMonitoringESGperformance20242023Figure 9.Areas of moderate to extensive board responsibilityLeadersBoardroom intent and action around ESG reporting and assurance continues to grow,for example through the Boards increased involvement in identifying ESG risks.That then needs to translate in

137、to an appropriate operating model that drives high quality ESG reporting.This governance will help ensure that reporting is assurance ready.”“George Richards,Head of ESG Assurance,KPMG in the UK ForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance

138、 imperative03 Expected benefits of ESG assurance increase as companies progress along the journey04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedContact us 23|The journey continues:Navigating the road to readiness 20

139、24 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.05 Five steps to help you become ready for ESG assurance revisited01 GovernanceHaving teams with the right skills is criticalESG reporting and assurance

140、 processes are complex so having teams with the right skills is critical to the endeavor.Generally,the underlying ESG data owners will likely have operational roles in the business,while the reporting process will be owned by the finance function.People with a depth of understanding of ESG content a

141、nd metrics,strong process and controls skills,the skill set to prepare financial information/statements and manage an audit,and detailed knowledge of assurance requirements are all critical to successful reporting programs.Leaders are making the most progress 86 percent are mid or completed implemen

142、tation of a team with the requisite skills.Nevertheless,as noted earlier,nearly six in ten Leaders(59 percent)also expect to need to make external hires.Beginners,meanwhile,have gone backwards and are losing ground.Three-quarters(73 percent)are just starting to put together their teams and a quarter

143、(23 percent)are still in the planning stage.The longer they leave it,the harder it is likely to become to find the people they need with the right skills.Another crucial aspect is training of existing staff in order to prepare them for a new era of ESG reporting and assurance,and upskill them in spe

144、cific areas as necessary.This is another area where we see significant differences between Leaders and others.Nearly half(46percent)of Leaders have a combination of mandatory and optional training throughout the year but only 15percent of Advancers and 1 percent of Beginners have this.In both Advanc

145、ers and Beginners,the most common approach is annual training(update and refresher)while Leaders have moved to a more agile and continuous learning framework that can better meet real world needs.“In the early years of required assurance,we expect that there will be a higher number of instances of m

146、odified reports on ESG.But this is not necessarily a bad thing as companies mature in their systems and processes and should be expected.However,this will require an educational process amongst assurance providers,preparers,and users of such reports.”Oliver Geier,Head of ESG Assurance Expert Group,K

147、PMG in Germany ForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance imperative03 Expected benefits of ESG assurance increase as companies progress along the journey04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to

148、help you become ready for ESG assurance revisitedContact us 24|The journey continues:Navigating the road to readiness 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.05 Five steps to help you become

149、 ready for ESG assurance revisitedFigure 10.Moderate or significant progress defining KPIs and managing ESG metrics97%96%88%62%91%91%96%71%Defining keyperformanceindicatorsCollecting andreporting KPIdata internallyCollecting andreporting KPIdata externallyIncentivizingprogress20242023LeaderBeginner4

150、7%48%38%30%64%55%56%28%Defining keyperformanceindicatorsCollectingand reportingKPI datainternallyCollectingand reportingKPI dataexternallyIncentivizingprogress2024202301 Governance3Data management is a critical piece of the puzzle in becoming ready for ESG assurance.There are three main components:I

151、dentifying the material topics and the right metrics Implementing processes to collect the data Putting controls in place to ensure data qualityQuantitative metrics or key performance indicators(KPIs)need to be clearly defined and disclosed.Performing a materiality assessment will help determine rel

152、evant KPIs.Under the EU requirements,a double materiality assessment should be conducted financial(i.e.financial effects of sustainability-related matters)and impact(the impacts on the upstream and downstream value chain),whereas ISSB standards consider financial materiality only.Either way,appropri

153、ate identification and definition of your KPIs,documentation of the process to collect the data to produce the KPI,and designing and implementing controls over the completeness and accuracy of the data must be in place to receive ESG assurance.KPI progressEncouragingly,we find that both Leaders and

154、Advancers have made progress since last year in defining KPIs and collecting and reporting ESG data.Nearly all Leaders(97 percent)have defined their KPIs,up from 91 percent in 2023,while for Advancers the percentage has grown from 77 percent to 81percent.They have also made progress in collecting an

155、d reporting ESG data Identify the applicable ESG disclosures and data requirements across functionsinternally(now 96 percent of Leaders and 87 percent of Advancers).However,interestingly the proportion of Leaders who collect and report ESG data externally has dropped back,from 96percent a year ago t

156、o 88 percent now.This may be a reflection of the more stringent requirements that they now face as regulations have emerged.Beginners meanwhile lag in every aspect and have fallen back on their positions last year.Less than half(47 percent)have defined their KPIs,for example,where a year ago that fi

157、gure was 64 percent.This is another example of how Beginners seem to be making backward progress as the requirements rise necessitating a redoubling of their efforts.Leaders have forged ahead in defining ESG KPIs and collecting them internally.Though,they report less progress than last year in repor

158、ting KPI data externally and incentivizing ESG progress.To overcome continued employee resistance and lack of urgency,companies may want to ramp up their incentive programs.ForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance imperative03 Expected

159、 benefits of ESG assurance increase as companies progress along the journey04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedContact us 25|The journey continues:Navigating the road to readiness 2024 Copyright owned by

160、one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.05 Five steps to help you become ready for ESG assurance revisited01 GovernanceFirms are also increasing the number of performance measures they capture from an average of 7-

161、8 in 2023 to 9 or more now,with Leaders often capturing more than 10.As we noted earlier,there has been a general increase in the number of companies capturing Scope 1 and 2 emissions data,and also the harder-to-capture Scope 3 data.Other areas seeing notable increases include Net Promoter Scores(NP

162、S),the percentage of suppliers with carbon reduction targets or goals,health and safety performance,social value KPIs,whistleblowing statistics,and compliance breaches by category demonstrating a growing emphasis on sustainability,transparency and responsible business practices.Figure 11.ESG perform

163、ance measures reported externally and routinely collected internally Greenhouse gas emissions(Scope 1 and 2)WasteGreenhouse gas emissions(Scope 3)Customer net promoter score(NPS)Carbon offsetsEmployee engagement Water usageHealth and safety performance Impact of climate-related risks(TCFD)Social val

164、ue KPIs(SROI)Workforce diversity and inclusion%of suppliers with carbon reduction goalsBrand/reputation/trust indices or KPIsCybersecurity incidences and breachesWhistle-blower statistics74%70%69%66%65%63%63%62%61%55%55%51%48%41%41%of respondents that collect data internally&report it externally+35

165、ppt+32 ppt+45 ppt+47 ppt+39 ppt+47 ppt+41 ppt+49 ppt+39 ppt+50 ppt+35 ppt+44 ppt+26 ppt+21 ppt+36 pptDiff.from 202368%58%51%47%52%48%41%43%52%26%48%40%55%67%28%Routinely captured internallyForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance imper

166、ative03 Expected benefits of ESG assurance increase as companies progress along the journey04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedContact us 26|The journey continues:Navigating the road to readiness 2024 Cop

167、yright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.05 Five steps to help you become ready for ESG assurance revisitedDeveloping integrated data capture systems For capturing data,the most common approach(52 pe

168、rcent)is an integrated governance,risk and compliance(GRC)system that manages material ESG matters.Amongst Leaders,this stands at 58 percent.A further 40 percent of Leaders have a bespoke ESG reporting management system.By contrast,Beginners are at a much less advanced stage with 77percent relying o

169、n specific or adhoc tools and systems to capture data.To help ensure data quality,it is essential to have robust data processes,controls and systems.This is another area where results are encouraging,with firms across categories moving towards more regular testing of processes and controls.Whereas i

170、n 2023,for example,nearly two-thirds(63 percent)of Beginners tested controls on a rotating basis,now more of them regularly test high-risk performance metrics.There has been a significant increase in the proportion of Leaders that test all performance metrics every year a 50 percent uplift,from 23pe

171、rcent to 34 percent.The research also finds that companies,are using methods for quality checking of ESG performance information,with the most widespread methods being quality checks by the manager responsible,management or internal audit testing,and disclosure committee or legal/compliance review.L

172、eaders on average carry out the widest range of quality checks.Last mile solutions for writing reports and disclosures have become more mature now and there are some good products on the market.Its obtaining the source data needed at the front-end,managing that data,and ensuring the correct governan

173、ce and controls are in place,are the big hurdles for organizations to get over.”“Farah Bundeali,National ESG Assurance Leader,KPMG in CanadaForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance imperative03 Expected benefits of ESG assurance increa

174、se as companies progress along the journey04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedContact us 27|The journey continues:Navigating the road to readiness 2024 Copyright owned by one or more of the KPMG Internati

175、onal entities.KPMG International entities provide no services to clients.All rights reserved.05 Five steps to help you become ready for ESG assurance revisited4One of the key aspects to becoming assurance-ready is to collect all necessary data.Companies are used to collecting financial data,but non-

176、financial data is a less familiar task and also comes in many different forms carbon-related,environmental,social,people-related and often sits in disparate pockets of the business.This challenge means that establishing digitized processes to collate,calculate and consolidate non-financial data is e

177、ssential.The survey finds that,overall,companies have not made significant progress in this regard compared to last year:62 percent are at mid-or complete implementation,a figure that a year ago stood at 59 percent.However,Leaders have made some strides here,with half(50 percent)at mid-implementatio

178、n and a further 43 percent having completed it,up from 34 percent in 2023.Beginners in particular need to accelerate their efforts here 70 percent of them are only starting to implement the systems they need while 18 percent are still in planning phase.Digitize ESG data processes and strive to ensur

179、e high quality dataFigure 12.Mid/full implementation of ESG data capture systemsFigure 13.Mid/full integration of ESG data systems with financial reporting systems43%34%10%8%17%13%50%61%59%53%13%14%45%46%20242023202420232024202320242023LeaderAdvancerBeginnerAll18%15%2%2%6%5%69%72%45%47%7%8%42%44%202

180、42023202420232024202320242023LeaderAdvancerBeginnerAllCompleted implementationMid-implementationCompleted implementationMid-implementationForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance imperative03 Expected benefits of ESG assurance increase

181、 as companies progress along the journey04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedContact us 28|The journey continues:Navigating the road to readiness 2024 Copyright owned by one or more of the KPMG Internation

182、al entities.KPMG International entities provide no services to clients.All rights reserved.05 Five steps to help you become ready for ESG assurance revisited01 GovernanceFinancial and non-financial integration:A work in progress One way to increase the maturity and efficiency of the process is to in

183、tegrate non-financial data capture with financial reporting systems.This can be a technical challenge but the expected benefits are significant.In this area,we find that not much has changed since last year.The majority of Leaders(69 percent)say they are at mid-implementation,with just under one in

184、five(18percent)having completed it.Overall,48 percent of companies are at mid-or complete implementation the same figure as in 2023.However,one area where we see more progress is in the number of technologies businesses are using to collect,store and analyze their non-financial data.This has increas

185、ed from around 4 last year to 4.5 this year,while among Leaders it has grown from 4 to nearly 6.The biggest increases are coming in the use of AI,blockchain,cloud,IoT,cybersecurity and risk management tools,and ESG-specific platforms.Having a clear audit trail is another critical feature of being re

186、ady for ESG assurance.But this is another aspect in which progress has stalled.Last year,only a quarter (26 percent)of respondents said they had a clear audit trial and this has only nudged up to 29percent.Leaders have made slightly more progress,moving from 30 percent to 37 percent,but this still l

187、eaves the majority of that cohort with more work to do.With potentially hundreds of ESG data points getting reported and assured,establishing a trail for the information is an important and necessary step.“Non-financial information is not like financial data,that you can more or less press a button

188、on your ERP system to produce.It is encouraging to see that,directionally,organizations are moving towards more systemization and automation to collect and report their ESG information,albeit with diversity in terms of progress.In some areas,theres still a way to go.”Sarah Bagnon-Szkoda,Partner in c

189、harge,ESG Department of Professional Practice,KPMG in FranceForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance imperative03 Expected benefits of ESG assurance increase as companies progress along the journey04 Challenges slowing down progress in

190、 preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedContact us 29|The journey continues:Navigating the road to readiness 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rig

191、hts reserved.05 Five steps to help you become ready for ESG assurance revisited5Obtaining ESG information from across a companys value chain is essential for many aspects of ESG reporting and assurance.Raising ESG standards and aspirations across the supply base is also a key aspect of an organizati

192、ons own total ESG footprint.For this reason,the survey shows that working with the value chain has become an increased priority for Leaders in particular.As they have made more progress on their own internal processes and systems,naturally they then have more capacity to look further down the line.H

193、owever,as we noted earlier,this is also one of the hardest of all aspects to master,with inadequate supplier performance being the single biggest challenge flagged by Leaders.Asking more of suppliersNevertheless,Leaders are sticking to the task and are increasing their demands of suppliers,setting m

194、ore stringent requirements.Over four in ten(42 percent)now place robust,product-specific requirements on their suppliers,up from 28 percent in 2023.Leaders have also strengthened their processes to help ensure suppliers support their ESG assurance efforts with more requesting suppliers to provide ES

195、G data into their own systems(64 percent)and integrating ESG screening into supplier onboarding(48 percent).There has also been a rise in Leaders requesting the supplier obtains ESG assurance,although this is still at relatively early stages,increasing from 10 percent to 23 percent.Most Beginners(78

196、 percent)still only have basic requirements,such as anti-bribery and corruption stipulations in contracts and legal documents unchanged from last year.Advancers have also made limited progress in this area,although over half(51 percent)request suppliers to provide ESG data into their own systems,and

197、 there has been a rise in the proportion of Advancers using contractual levers to encourage ESG performance(from 6 percent to 19 percent now).Work with the value chain to collect ESG informationFigure 14.Processes for ensuring suppliers support ESG effortsLeaderBeginnerAllRequest that supplier provi

198、des ESG data feeds intoyour companys data management system64%41%53%Integrate ESG screening into supplier onboarding process48%26%39%Ensure key suppliers support your companysESG strategy(e.g.,have set net-zero targets)47%24%37%Request that third-party supplier reports certainESG informationRequest

199、that third-party supplier obtains ESGassurance over its dataUse contractual levers(rewards/penalties)toencourage ESG performance24%35%25%23%19%23%16%16%17%None of the above0%7%2%ForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance imperative03 Exp

200、ected benefits of ESG assurance increase as companies progress along the journey04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedContact us 30|The journey continues:Navigating the road to readiness 2024 Copyright owne

201、d by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.05 Five steps to help you become ready for ESG assurance revisitedUnder the CSRD,companies are responsible for the data in their whole supply chain(and will need to repo

202、rt it between one to three years).Getting reliable and accurate data is therefore key.This is becoming a big focus and will impact those in the supply chain beyond the EU borders.”“Danielle Landesz Campen,Head of ESG Assurance,KPMG in the NetherlandsReliable and accurate supplier information really

203、matters because an organizations own ESG reporting is not complete without it.Many small suppliers do not have digitized systems or established processes to reliably gather data.How much can you trust the information youre getting from them?This is an area where robust,independent ESG assurance is e

204、ssential.”“Daniel Camilleri,Head of ESG Assurance,KPMG in AustraliaForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance imperative03 Expected benefits of ESG assurance increase as companies progress along the journey04 Challenges slowing down prog

205、ress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedContact us 31|The journey continues:Navigating the road to readiness 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.

206、All rights reserved.05 Five steps to help you become ready for ESG assurance revisitedMoving further forward on the ESG assurance journeyWe are entering a key phase on the path to ESG assurance.There is still time to prepare but there is also little time to lose.It is important to note that in the e

207、arly years of required assurance,we expect that there will be a higher number of instances of modified reports on ESG.But that is not necessarily a bad thing.A modification simply means that there is a matter that needs to be highlighted to stakeholders.In time,the collection and reporting of inform

208、ation is expected to improve and as a result,the number of modifications should reduce.One of the lessons from the Leaders is that the further you go in the process,the more you realize that there is a lot to do.Organizations that pick up the pace now are likely to be grateful for that decision.For

209、those in the initial stages,a materiality assessment is a good place to start.This helps identify relevant sustainability metrics for the business and your stakeholders,and anchors your ESG strategy,reporting focus,and assurance targets.Using an ESG assurance mapping technique can help you prioritiz

210、e metrics,identify gaps in the data,and determine what data needs to be fed into decisions the Board is making.Wherever you are in the journey,to be ready for ESG assurance you should aim to ensure that your ESG disclosures will meet the preconditions for assurance.This means having suitable criteri

211、a for your disclosures;and having sufficient evidence in terms of data,that is of appropriate quality to allow your auditor or assurance provider to form an assurance conclusion.With thorough preparation,clear communication,and collaboration among stakeholders,you can establish a robust foundation f

212、or the ESG assurance process,helping ensure the accuracy and transparency of your ESG data and reporting for external validation.The KPMG Ready for Assurance service can help you navigate the complexities of ESG assurance and be ready for the new regulatory requirements that are fast approaching.To

213、better understand your ESG Assurance readiness in comparison with your peers,complete KPMGs ESG Assurance Maturity Benchmarking tool.The regulations that are coming into effect provide the requirements and the guidelines but really this is about good business.Strong ESG reporting,underpinned by rigo

214、rous assurance,creates a discipline that enhances business processes and market position.KPMG professionals are helping organizations as they move along this path.”“Mike Shannon,Global Head of Assurance,KPMG InternationalForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues0

215、2 The rising ESG assurance imperative03 Expected benefits of ESG assurance increase as companies progress along the journey04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisitedContact us 32|The journey continues:Navigatin

216、g the road to readiness 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.05 Five steps to help you become ready for ESG assurance revisitedContact usKPMG International Mike Shannon E: Neil Morris E:n

217、eil.morriskpmg.co.uk Americas John Depman E: Asia Pacific Nicola Buddee E:.au Europe,Middle East,Africa Dirk Berkemeyer E:Australia Daniel Camilleri E:.au Brazil Sebastian Soares E:.br Canada Farah Bundeali E:fbundealikpmg.ca China Patrick Chu E:France Sarah Bagnon-Szkoda E:sbagnonkpmg.frGermany Oli

218、ver Geier E:Japan Tomokazu Sekiguichi E:Netherlands Danielle Landesz Campen E:landeszcampen.daniellekpmg.nlUnited Kingdom George Richards E:george.richardskpmg.co.uk United States Maura Hodge E:ForewordAbout the IndexExecutive summary01 ESG assurance:The journey continues02 The rising ESG assurance

219、imperative03 Expected benefits of ESG assurance increase as companies progress along the journey04 Challenges slowing down progress in preparing for ESG assurance05 Five steps to help you become ready for ESG assurance revisited 33|The journey continues:Navigating the road to readiness 2024 Copyrigh

220、t owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Contact usSome or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities.The information conta

221、ined herein is of a general nature and is not intended to address the circumstances of any particular individual or entity.Although we endeavor to provide accurate and timely information,there can be no guarantee that such information is accurate as of the date it is received or that it will continu

222、e to be accurate in the future.No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All

223、rights reserved.KPMG refers to the global organization or to one or more of the member firms of KPMG International Limited(“KPMG International”),each of which is a separate legal entity.KPMG International Limited is a private English company limited by guarantee and does not provide services to clie

224、nts.For more detail about our structure please visit this document,“we”,“KPMG”,“us”and“our”refers to the global organization or to one or more of the member firms of KPMG International Limited(“KPMG International”),each of which is a separate legal entity.The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization.Designed by Evalueserve.Publication name:The journey continues:Navigating the road to readiness Publication number:139457-G Publication date:June