Opportunity is passing us by

New Zealand is ranked 38 out of 58 countries in KPMG’s New Zealand supplement to the Global Survey of Sustainability Reporting 2022. The global survey compares the external reporting of the top 100 companies in each participating country.

The report shows that New Zealand’s sustainability reporting has taken steps towards more comprehensive Environmental, Social, and Governance (ESG) reporting, but our progress has been comparatively less than that of our key global partners.

In the 2017 survey, New Zealand was one of the standout performers globally for the largest increase of organisations including ESG and sustainability information in their annual reports.

Ian Proudfoot, Partner and Head of KPMG NZ IMPACT Measurement, Assurance and Reporting, says “the increase since our last survey in 2020 is positive, but given the scale of issues we face, and the impacts that corporate organisations have on people and the planet, our rate of progress is underwhelming. We are moving forward, but not fast enough to catch up with global leaders.

"Our current ESG reporting trajectory will make it harder for our companies to access capital, to attract world-class talent, and develop new markets. We are letting the significant opportunities that we could create from delivering world-class ESG reporting pass us by. We need a circuit breaker now so that New Zealand organisations can start to take bigger steps forward, faster.”

With the release of the new Climate Standards next month, Ian Proudfoot expects the regulations will raise the bar on New Zealand’s ESG reporting, even for those who won’t fall under the scope of the mandatory reporting.

“We are seeing that stakeholders are seeking more comprehensive information to help them make key decisions about the companies they choose to do business with, and to work for. It’s clear that the same level of rigour we use for financial information is now necessary for non-financial information."

“I look forward to the day when comprehensive sustainability reporting is the norm rather than the exception,” says Ian.

Report highlights 

The 2022 Survey reveals that since 2020:

• Climate change is the top priority, with just over 50% identifying this as a risk to their organisation, and 67% adopting a carbon reduction target.
• 80% of New Zealand organisations report on their ESG performance (66% in 2020).
• 59% of New Zealand organisations include ESG reporting in their annual report (48% in 2020).
• 41% of New Zealand organisations’ ESG information is independently assured (24% in 2020).
• New Zealand has made progress with a 17% point increase in organisations obtaining formal assurance over their ESG-related information. However, for many, this is only limited to assurance over a single element of their reporting. 
• Amongst our largest sectors, New Zealand’s lifeline utilities sector is performing ahead of other sectors.
• Four new questions have been introduced, acknowledging social and governance elements as risks, having a dedicated team member responsible for sustainability matters, and whether sustainability matters have been included in compensation within an organisation. These new questions point to where stakeholder interest is increasing globally. 

The full report can be accessed from KPMG's website.

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