Diving overview:
Most CFOs and other finance leaders believe companies in their industry will fail to meet sustainability targets, with only 47% believing their companies will meet net-zero or similar targets on time. An EY study found that. EY survey of 2,000 CFOs, managers and other financial leaders and 815 institutional investors found that institutional investors are a bit more optimistic, with 53% saying their companies will meet their sustainability goals. He said he is confident that he is on track to do so. “Customers, shareholders, regulators and investors are increasingly demanding that companies address their environmental impact and sustainable practices,” said Nicolas Lecoq, Global Leader of Financial Accounting Advisory Services at EY. said in a statement Wednesday. “This means the integrity of corporate reporting is more important than ever.”
Dive Insight:
According to EY, CFOs at large companies in the US and Europe face a “fluid situation” when trying to comply with regulations around sustainability reporting.
Under the Corporate Sustainability Reporting Directive, around 50,000 companies listed on regulated markets in the European Union will be required to submit detailed reports on environmental, social and governance topics from next year.
In the United States, the Securities and Exchange Commission reduced requirements for rules focused on climate risk disclosure before putting regulations on hold in the face of legal challenges. Companies will be required to disclose the impact of climate change on their finances, operations and business strategies.
According to EY, more than two in three finance leaders (69%) believe that their company’s stakeholders have asked more questions about sustainability and other “non-financial drivers of value” in the past two years. He said he noticed that there was.
At the same time, 96% of finance leaders are concerned about the integrity of non-financial data, and 55% say non-financial disclosures may lack verifiable data, leading to “greenwashing”, This means they believe they could face allegations of exaggerating their sustainability performance. To EY.
EY also said that 55% of finance leaders expect the costs of sustainability disclosure to be burdensome, and 44% of respondents believe the rules are too complex.
According to EY, two in five finance leaders believe that artificial intelligence can help report on sustainability and other aspects of business, but 29% are first looking more deeply into the risks posed by the technology. He says he wants to understand.
According to EY, more than half (57%) of institutional investors believe that AI can help assess the completeness and accuracy of disclosures of both financial and non-financial information.
