Recent KPMG surveys of industries found that approximately 43 percent were committed to “acknowledging the risk of climate change in their financial reporting.” This percentage was higher among technology firms — 50 percent included climate change risk in their financial reporting. Unfortunately, the details are less favorable. The Task Force on Climate-related Financial Disclosures (TCFD) recommends what should be reported and how. A mere 18 percent of companies adhere to TCFD standards. Technology firms are higher at 24 percent, but progress clearly needs to be made.
Talking about sustainability is noble, but reporting on sustainability is commitment. Setting goals, evaluating progress and sharing results with invested partners (and potentially the broader public) is critical to ensuring veracity, accountability and ultimately progress. Moreover, with the advancement of technology — AI, bots, etc. — it is much easier for individuals or organizations to scrutinize any company’s reporting on sustainability progress. Those same individuals or organizations can release their findings to the broader public via social media and elsewhere creating considerable potential for transparency.
It is an enormous challenge. The higher the profile of a firm, the greater the examination of any ESG initiative is. But being held to account will help ensure progress. Creating goals is meaningless unless a firm has a plan with transparent reports and a willingness to accept scrutiny from within and without.