An overwhelming majority of companies say ESG reporting is a business advantage – BCSDH’s second ESG survey
Budapest, 13 November 2023 – Nine out of ten companies expect to see business benefits from ESG reporting within five years, and more than half of the BCSDH member companies surveyed report regularly. The social and governance leg of ESG is at the forefront of importance, with companies preferring to systematically collect and process this type of data. Biodiversity, on the other hand, is barely represented within the environmental dimensions, and strengthening this could be a priority for companies. There are several factors slowing down the integration of ESG aspects in companies, the main barriers being too many standards and the difficulty of producing data/KPIs of sufficient quality.
In 2023, the Business Council for Sustainable Development in Hungary (BCSDH) conducted its second ESG survey among its member companies, with KPMG as its professional partner. In the survey, 70 companies from 14 industries shared their experiences along 22 questions, in which the respondents covered, among other things, their ESG reporting and data collection habits, the main motivating and limiting factors related to ESG, and the role of ESG in the life of their organisations.
90 percent of survey respondents believe that ESG-based reporting could benefit their business in the next 5 years, and six out of ten companies (61 percent) already regularly produce ESG reports, most often at the international or parent company level and based on the GRI standard. Many have also come across the upcoming legislative requirement for ESRS standards under the CSRD, but their uptake is still low. A similar proportion of companies that already prepare ESG reports and those that are planning to do so prefer a standalone (34 percent) or integrated (33 percent) reporting format for the disclosure of their ESG data. The main drivers for ESG reporting include enhancing reputation, meeting shareholder expectations, and meeting regulatory requirements.
61 percent of companies believe they are prepared for reporting under the CSRD, and have a practice of reporting, while 84 percent publicly disclose information about their company’s performance.
In contrast to the 2021 survey, when companies rated the environmental dimension of ESG as the most important for their operations, this year there is a greater emphasis on social and governance issues, and this is reflected in their data collection and management practices. 85% of the companies surveyed collect some form of ESG data, most commonly in the areas of health and safety, employee information such as education, and carbon emissions. For at least one ESG topic, 78 percent of responding companies set targets, but this proportion will certainly become more robust in the future along the lines of CSRD expectations. These targets are discussed occasionally in management meetings by less than half of the member companies.
However, the picture is different when looking at the dimensions included in ESG reports. In this respect, environmental areas (such as carbon emissions, and energy consumption) continue to stand out. Biodiversity is the area where the least data is collected: six out of ten companies surveyed (62%) do not collect any data at all, although biodiversity has become a key sustainability issue this year and in the coming period, and is an area where progress is needed.
37 percent of responding member companies have already requested data from their stakeholders on carbon emissions, ethical operations, circular economy, and alternative energy and efficiency, while half of their customers (54 percent) are requesting data along environmental and governance dimensions. From the financing side, one in four companies is still asked to show progress on carbon emissions, alternative energy and efficiency, waste management, and health and safety.
In terms of organizational functioning, 72% of the companies surveyed have a dedicated ESG manager at the decision-making level. Half of companies have a dedicated ESG specialist in their sustainability department, a significant shift from two years ago.
Lack of sufficient detail in the legal requirements, too many standards, and insufficient quality of data/KPIs were the main constraints to incorporating ESG considerations in companies, as highlighted by respondents.
A summary of the Survey results can be downloaded here.
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