EY survey: Three-quarters of companies champion enforced global standards for environmental reporting

  • 76% of finance leaders in companies around the world back call for globally consistent standards for environmental, social and governance (ESG) reporting
  • 74% of finance leaders agree that improved nonfinancial reporting is accelerating, driven by COVID-19 pandemic
  • Finance leaders urged to look at current approach to ESG reporting; do more to advance ESG agenda; and develop people and technological capabilities

Businesses around the world are strengthening their support for globally consistent and enforced standards on environmental reporting, but many still have some way to go to improve their own efforts, according to the 2021 EY Global Corporate Reporting Survey.

The report, now in its eighth year, canvasses the views of more than 1,000 finance leaders from companies spanning 14 sectors and 26 countries. It shows that 76% of finance leaders, across some of the world’s major companies, now back the need for globally consistent ESG standards, and that 74% believe these standards must be mandatory.

In addition, the report looks at how businesses need to adapt in the face of major challenges, including the COVID-19 pandemic and technological change, in order to provide enhanced reporting. It also examines the role that finance functions can play in achieving this.

Accelerating the pace of change in corporate reporting


The findings follow the COP26 announcement of the new International Sustainability Standards Board (ISSB), which will develop a comprehensive global baseline on sustainability disclosure standards to meet the needs of investors around the world.

According to the survey, nearly three quarters (74%) of finance leaders say they believe that the move toward better nonfinancial reporting is gaining momentum, and many cited the COVID-19 pandemic as a key factor in this acceleration. There is also a strengthening view among finance leaders that ESG is a significant part of their role – 70% of those surveyed believe this to be the case now, up from 63% last year.

However, the survey also highlights a number of challenges that companies face in providing useful ESG reporting. Thirty-nine percent say there is a disconnect between ESG reporting and mainstream financial reporting; 38% pointed to a lack of focus on material issues; and the same proportion observed that there is a lack of information on long-term value. A third (33%) said they believe that a lack of real time information is an obstacle, while 32% highlighted the absence of any forward-looking disclosure.

Finance leaders say that the No. 1 barrier to producing useful ESG disclosures is “getting clarity from investors on what they want from ESG reporting.” In addition, the survey exposes a gap between the views of companies on the usefulness of their reporting and the perspective of investors, who use the information from companies to make decisions on their portfolios.

For example, 50% of investors surveyed in the EY organization’s recent Institutional Investor Survey are worried about the lack of focus on material issues, and 51% worry about the level of information available on long-term value. Investors are also more likely than corporations to want mandatory global standards – 89% compared to 74%, according to the same study.

Guillaume Macczak, Consulting CFO & GBS Services Associate Partner, EY Romania: “Investors relationships in Romania (through reporting mostly) is still heavily manual and not always in line with Western Europe standards, except if supported by the group for inbound companies. We see it as a compliance checklist with a lack of perspective most of the time, not taking advantage of the communication opportunity this documents could be. Performing a review of stakeholders’ expectations, being shareholders, potential investors, customers, employees, is a must. Financials and ESG reporting should come to support a strategy, a vision of the business in the future, a set of values demonstrated by accurate data”.

Massimo Bettanin (photo), Partner, Climate Change and Sustainability, EY Romania: “In Romania, there is still a limited number of companies that choose to publicly disclose their non-financial performance, leading to a gap in terms of comparability and transparency which does not help investors and other key stakeholders to make fully informed decisions. Furthermore, even in the case of companies that choose to publicly disclose ESG data and performance, we notice a tendency to report only positive information, very often with no independent third party verification, raising legitimate questions regarding the reliability of the information provided”.

The 2021 EY Global Corporate Reporting Survey also highlights an urgent need for companies’ finance teams to address major obstacles to improved reporting. Asked to name the primary challenges to producing useful and effective ESG data and disclosures, 31% mentioned a lack of reliable systems for aggregating and analyzing ESG data.

There is also a clear need to address issues with talent and skills. Seventeen percent of the leaders questioned said that the main problem they face is that that finance professionals appear unwilling to adapt to changing needs, while 16% pointed to a skills shortage in relation to data, and 12% were concerned about a lack of technology to address current and future challenges.

To address their data needs, businesses are prioritizing investment in analytics, with planned spending across several key areas including advanced and predictive analytics (39%), cloud-based tools (38%), AI (36%), robotics/automation (29%) and blockchain (25%).

Guillaume Macczak: “Despite a very strong IT sector and innovation environment, use of data is still at a very early stage in Romania and trust is still mostly relying on manual analysis. Corporate reporting (ie Financial and soon ESG) would benefit from a clear long term data strategy across the company.

Finance leaders need to take momentum of the opportunity created by the COVID-19 pandemic to lead the C-Suites into defining their strategy, investing smartly in technologies and developing use cases to support the business. These last 2 years have demonstrated how agile and responsive their team was, and they should capitalize on that to create trust across the company.”


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