Global ESG Monitor 2024 Highlights Deficiencies in Sustainability Reporting

The Global ESG Monitor (GEM) 2024 reveals that fundamental principles of good sustainability reporting are still not adequately observed by companies. The study analyzed reports from 194 companies, showing an average quality score of only 45 out of 100 points. This indicates significant disparities in report quality, with the best scoring 79 points and the worst just 13 points.

The GEM 2024 identifies a lack of clarity in financial materiality and transparency in sustainability reports. The upcoming European Sustainability Reporting Standards (ESRS) aim to address these deficiencies by providing clear guidelines. Despite this, only 59 percent of companies conduct a double materiality analysis, crucial for assessing a company's environmental and financial impacts.

The report also notes that while the length of sustainability information in annual reports has increased, it does not ensure completeness. Key issues such as biodiversity and affected communities are often inadequately covered. However, high-quality sustainability reporting presents significant opportunities for companies to attract financial capital and better manage risks and opportunities.