KPMG Releases 2024 Sustainability Reporting Survey

KPMG Study: Over 40% of Large Companies Globally Integrate ESG Performance into Executive Compensation

A new report from global professional services firm KPMG reveals that the world’s largest companies are increasingly incorporating Environmental, Social, and Governance (ESG) performance into executive and board compensation, appointing dedicated sustainability leaders, and setting climate targets, while preparing for regulatory requirements related to sustainability disclosures.

The report, titled KPMG 2024 Sustainability Reporting Survey, analyzes the sustainability reporting practices of 5,800 companies across 58 countries and regions. It focuses on the world’s largest companies, referred to as the “G250,” as well as a broader group of companies, the “N100,” representing the top 100 companies in each of the 58 jurisdictions surveyed. KPMG publishes this report biennially.

The release of this report comes at a time when companies face imminent mandatory sustainability requirements, including the European Union’s Corporate Sustainability Reporting Directive (CSRD). Starting this year, CSRD applies to the EU’s largest companies and will gradually extend to smaller entities and thousands of global corporations in the coming years. Based on the new European Sustainability Reporting Standards (ESRS), CSRD introduces detailed reporting obligations on companies’ impacts on the environment, human rights, social standards, and sustainability-related risks.

According to the report:

• Over half (56%) of G250 companies now have a dedicated board member or leadership team member responsible for sustainability, up from 45% in 2022. Among N100 companies, 46% have a sustainability leader, compared to 34% in 2022.

• The proportion of companies factoring sustainability into executive or board compensation has risen to 30% among N100 companies (up from 24% in 2022) and to 41% among G250 companies (up from 40% in 2022).

Notably, while the increase among G250 companies is relatively small, this group is significantly influenced by U.S. companies, where the proportion of firms integrating sustainability into compensation actually dropped from 53% in 2022 to 39%. In contrast, other regions have shown substantial growth: European companies increased from 29% in 2022 to 34%, while Asia-Pacific companies saw a jump from just 20% in 2022 to 33%.

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