Only 3 out of 10 Global Companies Have Completed ESG Certification Preparation... Samjong KPMG Report

'Seondo' Group Ratio 29%... No Significant Change from 9 Months Ago
ESG Disclosure and Certification Preparation, Cost Reduction Effects and Business Risk Mitigation
"Korean Companies Also Urgently Need to Prepare for ESG Disclosure and Certification"

A survey revealed that only about 30% of global companies have policies, technologies, and systems in place for independent ESG data assurance.

Samjong KPMG published the 'Annual ESG Disclosure and Assurance Readiness Index (KPMG’s annual ESG Assurance Maturity Index)' report on the 18th. The report analyzed the status of ESG disclosure and assurance readiness based on responses from 1,000 senior executives and board members across various industries, regions, and revenue sizes. Companies were classified into 'Leaders,' 'Advancers,' and 'Beginners' stages, and readiness indices were calculated for each group.

According to the report, only 29% of respondents identified as the 'Leaders' group who have completed ESG disclosure and assurance readiness, showing little change from 25% nine months ago. This year, the average readiness of the 'Leaders' and 'Advancers' groups increased by 3.4% and 1%, respectively, while the 'Beginners' group saw a 5.3% decline.

The 'Leaders' group viewed that as disclosure and assurance readiness progressed, benefits such as cost reduction, improved product/service quality, decreased business risks, enhanced employee engagement, improved credit ratings, and expanded market share increased.

Conversely, the 'Beginners' group was lukewarm about cost-saving effects through ESG disclosure and assurance. Among 'Beginners,' the response rate indicating that ESG disclosure and assurance helped reduce costs was 30 percentage points lower than that of the 'Leaders' group. The report emphasized the need for separate government incentives to accelerate ESG disclosure and assurance progress among the 'Beginners' group.

Companies with higher revenues tended to have more advanced ESG disclosure and assurance. Companies with revenues exceeding $10 billion had an average readiness score of 55.1 points, whereas those with revenues below $5 billion scored only 39.3 points.

By country, France recorded the highest score (52.4 points), followed by Germany (52.3 points) and Japan (50.2 points).

Among all respondents, 44% identified securing internal technology and expertise as a priority for ESG disclosure and assurance. 54% of companies planned to hire external personnel, with the rate being higher at 59% among 'Leaders.'

Collecting data from suppliers is a crucial step in ESG disclosure and assurance, especially playing a significant role in calculating Scope 3 carbon emissions. Among 'Leaders,' 42% requested specific product information from suppliers, a significant increase from 28% in 2023.

Hwang Jeonghwan, a partner at Samjong KPMG, stated, "With the implementation of the European Union’s Corporate Sustainability Reporting Directive (CSRD) starting this year, direct and indirect impacts on Korean companies are expected. As ESG disclosure and assurance readiness is urgent, companies must ensure the accuracy and transparency of ESG data and thoroughly prepare for external assurance."

This content was produced with the assistance of AI translation services.