Environmental reporting taking precedence over cybersecurity concerns: Perennial
Despite ongoing, serious threats from cybersecurity criminals and a spate of high-profile cybersecurity incidents in recent years, the problem has been displaced as the most pressing environmental, social and governance issue for companies according to the 2023 Perennial Better Future Survey.
In its place, greenhouse gas emissions and alignment with the Paris Agreement, an international treaty on climate change, are taking precedence. Almost half the respondents in the annual survey had greenhouse emissions as one of their top three concerns.
“This may represent the increasing national focus on environmental concerns as well as global reporting standards increasingly prioritising environmental reporting,” says Emilie O’Neill, co-head of ESG and equities analyst of the Perennial Better Future Trust.
It’s the pressure of meeting global reporting standards like the Paris Agreement, O’Neill believes, that are driving the shift in priorities for company executives. Exacerbating the issue is the lack of a single reporting standard for ESG compliance that all companies can benchmark themselves across, with the Global Reporting Initiative (GRI) sitting alongside standards like the Task Force for Climate-Related Financial Disclosures (TCFD) and the Workplace Gender Equality Agency (WGEA).
There is hope, however, that another developing set of standards, the International Sustainability Standards Board, will provide a more overarching benchmark.
“Most respondents identified that ISSB will help to standardise ESG disclosures, while 13 per cent think it will increase the reporting burden for corporates.” O’Neill said. “Additionally, 44 per cent agreed or strongly agreed that sustainability reporting has become burdensome, up from 33 per cent in 2022 and 2021.”
This “burdensome” nature of ESG reporting standards has been a developing issue in recent years. According to a 2022 KPMG report, Survey of Sustainability Reporting, “there is an urgent need for globally consistent and comparable standards to support the information needs of investors”.
The reason these standards are required? “There is currently diversity in what sustainability-related information companies publish and when.”
The hope for company executives is that the ISSB, will satisfy its objective, which KPMG characterised as: “to create a global baseline of investor-focused sustainability standards that jurisdictional standard-setters can build on”.