Deloitte Survey Reveals Significant Progress in Corporate Sustainability Efforts Amid Ongoing Challenges

Deloitte's new 2024 Sustainability Action Report unveils a landscape of rapid evolution and strategic shifts in corporate sustainability practices across the United States. The survey, which polled 300 senior business leaders, highlights significant progress in Environmental, Social, and Governance (ESG) integration, while also revealing persistent challenges in data quality and reporting.

The findings from the survey include:

1. Widespread Progress: An overwhelming 98% of executives reported some level of progress toward their sustainability goals and targets over the past year, with over 75% citing significant or moderate advancements.
2. Capacity Building: Companies are strategically integrating ESG into their workflows, creating cross-functional ESG working groups, and establishing new roles such as Chief Sustainability Officers and ESG controllers.
3. Recognized Benefits: More than half (51%) of respondents identified greater efficiencies, lower risk, and enhanced stakeholder trust as the top three internal business benefits from investing in sustainability reporting. Externally, improved brand reputation, better talent attraction, and higher pricing abilities were highlighted as expected outcomes.
4. Data Quality Challenges: Despite progress, 57% of respondents cited data quality as their top challenge in ESG reporting, with 88% listing it among their top three challenges. Documentation and sign-off were also reported as significant hurdles by 81% of executives.
5. Emissions Reporting: While 74% of companies are prepared to disclose Scope 1 greenhouse gas emissions (up from 61% in December 2022), only 15% are currently preparing and disclosing Scope 3 emissions.
6. Assurance Trends: Nearly all respondents (99%) plan to obtain assurance or engage in assurance readiness for their sustainability data, indicating a strong commitment to data reliability and transparency.

Kristen Sullivan, Audit & Assurance Partner and Sustainability and ESG Services leader at Deloitte & Touche LLP, commented on the findings: "In the rapidly changing ESG landscape, we've seen considerable strides among businesses. The creation of dedicated ESG teams, the rise in specialized roles, and investments in sustainability reporting all indicate a strategic shift toward embedding sustainability into their core operations."

The report also highlights the impact of recent regulatory changes, including the landmark SEC climate ruling and mandatory climate reporting requirements for both public and private companies. These developments have spurred a new era of capacity building within organizations.

As the sustainability landscape continues to evolve, with new regulations and increasing stakeholder expectations, U.S. companies are demonstrating a strong commitment to strengthening their ESG capabilities and reporting practices. However, the persistent challenges in data quality and consistency in reporting standards underscore the need for continued focus and investment in this area.

The 2024 Sustainability Action Report provides valuable insights into the current state of corporate sustainability efforts, offering a roadmap for companies looking to enhance their ESG integration and unlock the multifaceted value of high-quality sustainability reporting.

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