Regulatory changes and increasing stakeholder pressure for high-quality environmental, social, and governance (ESG) data are adding to reporting complexities for organisations. To meet and keep up with these demands, companies plan to leverage technology to simplify their processes in this space.
Many professionals across sectors are struggling to integrate ESG reporting across their teams and departments as the regulatory requirements increase in complexity, according to a survey report from global software company Workiva.
The report, 2024 ESG Practitioners Survey, found that requirements from the Corporate Sustainability Reporting Directive (CSRD) have “forced thousands of companies both inside and outside of the European Union to rethink long-held reporting practices”, with technological transformation underpinning many companies’ strategies.
Difficulty adapting to regulatory and stakeholder pressures continues to challenge companies. Eighty-seven per cent of ESG practitioners are finding it difficult to adapt their reporting processes to comply with new regulations, the report said. Fifty-nine per cent said that ESG regulation has disrupted their company’s reporting processes, and this number is higher amongst executives, with 65% who report difficulties in this area.
Workiva surveyed more than 2,000 professionals in finance and accounting, sustainability, internal audit, legal, and compliance from organisations across North America, Europe, and Asia.
Problems adapting current practices to meet the demands of new requirements has companies assessing how to make their processes more cross-functional.
Ninety-two percent of respondents believe integrating technology will improve collaboration across their teams reporting in this area, and the same number are planning to undertake digital transformation projects to initiate these changes, the report said. “Practitioners believe that their teams must be as integrated as their data — and though integration is challenging, it is a worthwhile endeavour,” the report said.
Respondents said these transformation initiatives are expected to bring other benefits, including improved technology integration (92%), improved workflows and internal processes (91%), integration of controls within the reporting environment (90%), and reduced data complexity (89%).
Integrating finance, sustainability, and compliance processes enables individuals to focus more time on value-added work outside of reporting, 85% of respondents reported. However, 81% found collaborating across departments challenging, including 25% who called it very challenging.
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