In 2017, New Zealand was one of the standout performers globally for the largest increase of organisations including Environmental, Social and Governance (ESG) information in their annual reports. The expectation, with the arrival of the new governance codes that same year, was to see further growth and adoption of ESG reporting. However, while it is encouraging to see that we have made progress in some areas, the results of KPMG’s Survey of Sustainability Reporting 2020 suggest that New Zealand has room for improvement when it comes to keeping up with our global peers.
The 2020 Survey reveals that since 2017:
- There has been a slight increase in the number of New Zealand entities reporting on ESG matters (up to 74% from 69%). This improvement is broadly in line with several of New Zealand’s primary trading partners, with the notable exception of Australia’s 15-percentage point increase to 92%.
- Of the New Zealand organisations who report on sustainability performance, 47% (an increase of 7%) include sustainability results in their annual reports.
- While the percentage of New Zealand organisations whose ESG information is independently assured has increased from 7% to 28%, it is significantly lower than global peers (around 50%).
- There has also been a significant increase in the number of organisations acknowledging climate risk in their financial or annual report – up from 10% to 39%.
According to KPMG Partner, Simon Wilkins: “While progress is being made, much remains to be done. We need to enhance the quality of ESG reporting if we intend meeting increasing international and domestic stakeholder expectations.”
A New Zealand supplement to the global Survey results, acknowledges that in a world where facts and alternative facts have become interchangeable, it is no surprise that consumers, regulators, employees, investors, communities and other stakeholders are looking for reliable information. Assurance of the information included in an organisation’s reports increases confidence that it provides a reasonable and truthful interpretation of their activities.
The supplement also notes that the pace of change in climate change reporting is rapid but its voluntary adoption by business indicates its importance; and that the impact of different drivers and business contexts affects the way the various industry sectors approach their reporting.
“Sustainability reporting is a window into readiness to meet global environmental and social challenges. Organisations will be judged on whether they ‘get it’ or not. ‘Getting it’ means providing substantive, relevant, data rich information that demonstrates a real plan to meet the challenges ahead and charts progress. Not only is this doing the right thing, it is core to resilience and value,” says Wilkins.
The report’s KPMG New Zealand based authors put forward the case for substantive action and provide key considerations for boards and executive teams, including the need for alignment, investment in talent and skills, understanding stakeholders, choosing a suitable framework, planning for high quality ESG data needs and, instead of waiting for mandatory climate reporting, getting started now.
Note to editors:
About the survey
The KPMG Survey of Sustainability Reporting 2020 is the largest and most comprehensive to date, reviewing the reporting of more than 5,000 organisations in 52 countries. This included 100 of the largest revenue generating organisations in New Zealand covering private and public sectors, from large multi-nationals to cooperatives and government agencies.
Reporting that was reviewed included annual financial or integrated reports, sustainability reports, stand-alone reports and company websites published between 1 July 2019 and 30 June 2020. This is the 11th edition of the KPMG Survey of Sustainability Reporting which was first published in 1993.
The research has been conducted by KPMG IMPACT, a newly established initiative of KPMG firms. KPMG IMPACT brings together professionals and subject matter experts from across KPMG’s global organisation to support the delivery of the United Nations Sustainable Development Goals.
For further information:
Head of Marketing and Communications
KPMG New Zealand
+64 21 455 331