Sustainability Reporting 2024: Are Companies Ready for the Big Leagues?

Sustainability reporting has evolved from a nice-to-have to a must-do. For years, it’s been voluntary—a chance to show off green credentials. But now? Regulators and investors are upping the ante. KPMG’s 13th Survey of Sustainability Reporting couldn’t have landed at a better time. With mandatory reporting on the horizon for many countries, the survey offers a fascinating look at how global companies are preparing for this seismic shift—or not.

Sustainability reporting has gone mainstream. Among the world’s 250 largest companies (the G250), an impressive 96% are reporting on their sustainability efforts. But dig a little deeper, and you’ll see cracks in the foundation. While frameworks like the Task Force on Climate-Related Financial Disclosures (TCFD) are gaining traction (75% of G250 firms now align with it), challenges like biodiversity reporting remain underwhelming. Only half of G250 and N100 companies are addressing this critical issue, despite the growing environmental and economic risks of biodiversity loss.

Europe, as you might expect, is leading the charge. The EU’s Corporate Sustainability Reporting Directive (CSRD) is setting the bar high, even though compliance is still a few years away. Many companies are already aligning with European Sustainability Reporting Standards (ESRS), proving they’re taking the transition seriously.

But the real question isn’t who’s reporting—it’s how well they’re doing it.

Belgium’s Balancing Act

Belgium offers an interesting microcosm of global trends. At first glance, the numbers look good: 88% of Belgium’s top 100 companies (N100) are publishing sustainability reports, outpacing the global N100 average of 79%. Even better, 71% have ditched standalone ESG reports in favor of embedding sustainability metrics into their annual reports, a move that signals ESG is no longer a siloed afterthought but a key part of corporate strategy.

Yet Belgium’s progress isn’t without its challenges. The country’s reliance on voluntary frameworks like the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) is admirable, but it won’t cut it once the CSRD requirements kick in. Mandatory compliance with ESRS will demand a higher standard of rigor, comparability, and assurance—areas where Belgian companies, like their global peers, still fall short.

One of the most promising shifts in Belgian reporting is the rise of materiality assessments. A remarkable 71% of Belgian companies now identify material topics, with nearly half embracing double materiality—a concept that’s redefining how businesses understand their impact. This approach evaluates not only how the world affects a company’s bottom line but also how the company impacts the world.

This isn’t just a regulatory checkbox; it’s a profound shift in how businesses tell their ESG story. Done well, it’s a narrative that resonates with investors, customers, and employees alike.

The Climate Crisis & Beyond

When it comes to climate reporting, Belgian companies are stepping up. A 10% increase since 2022 means 62% of firms now identify climate risks as business risks. Most rely on narrative descriptions, but only a handful (6%) use scenario analysis to model future risks—a critical gap that could leave companies blindsided by climate shocks.

On the plus side, 81% of Belgian companies now report carbon reduction targets, up from 64% two years ago. Science-based targets are also gaining momentum, with 53% of companies adopting or planning to adopt them.

But while climate gets the spotlight, biodiversity is left in the shadows. Only 26% of Belgian companies recognize biodiversity as a risk—well below global averages. With nature playing a vital role in global supply chains, this blind spot could become a significant liability.

Leadership: Who’s Steering the Ship?

ESG initiatives live or die based on leadership. The good news? Sustainability is finally making its way into the boardroom in Belgium. Over half of N100 companies now have a board member or executive overseeing ESG efforts, a sharp increase from 2022. Even better, 37% are linking sustainability metrics to executive pay, sending a clear signal that ESG isn’t just a buzzword—it’s a business priority.

The world of sustainability reporting is at a crossroads. For Belgian companies, and global ones too, the shift from voluntary to mandatory frameworks isn’t just a compliance challenge—it’s an opportunity. Companies that see ESG reporting as more than a regulatory burden will find themselves ahead of the curve, building resilience and trust in an increasingly skeptical world.

But the clock is ticking. Investors, regulators, and society aren’t waiting around for half-baked progress. The leaders of tomorrow will be those who embrace transparency, tackle the tough issues, and lead with integrity.

The question isn’t whether sustainability reporting will be mandatory; it’s whether your company will be ready when it is.

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