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75% of Global firms unprepared for ESG requirements according to KPMG


Integrating ESG requirements into companies.

A recent report by KPMG has highlighted that a substantial proportion of companies worldwide are ill-prepared to meet Environmental, Social, and Governance (ESG) requirements. The report reveals that as many as three-quarters of global firms are struggling to align with ESG standards and expectations, and matters will only worsen as regulations further tighten.

Key findings

Limited ESG Integration

The report underscores that many companies are grappling with integrating ESG principles into their core business strategies. This lack of integration is seen as a major obstacle to meeting ESG requirements.

Inconsistent Reporting

KPMG’s findings indicate that there is a lack of consistency in reporting ESG performance among firms. This inconsistency makes it challenging for investors and stakeholders to assess and compare ESG efforts.

Regulatory Pressures

The report also highlights the growing regulatory pressures on companies to disclose their ESG performance. As governments and regulatory bodies worldwide introduce more stringent reporting requirements, businesses are being compelled to enhance their ESG efforts.

Investor Scrutiny

Investors are increasingly scrutinizing ESG factors when making investment decisions. Companies that fail to meet ESG standards risk losing investor confidence and access to capital.

Industry Variations

KPMG’s analysis reveals that ESG readiness varies across industries. Some sectors are more advanced in their ESG initiatives, while others lag behind.

Supply Chain Considerations

The report emphasizes that supply chain sustainability is becoming a critical factor in ESG evaluations. Companies need to assess and improve the ESG performance of their suppliers to meet growing demands from stakeholders.

The Role of Leadership

Leadership and board-level commitment are identified as crucial factors in successfully implementing ESG strategies. Companies with strong leadership support tend to perform better in meeting ESG requirements.

In conclusion, KPMG’s report sheds light on the global business landscape’s challenges in adapting to ESG requirements. It underscores the need for companies to prioritize ESG integration, standardize reporting, and align their strategies with evolving ESG expectations to thrive in an environment where sustainability and responsible business practices are paramount. In other words, companies must integrate sustainability into their everyday operations. This could involve adopting energy-efficient practices, reducing waste, and promoting diversity and inclusion within the workforce. When sustainability becomes a core part of the business model, it enhances the credibility of the company’s claims.

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