ESG Disclosure Ramps Up, Increasingly Important in M&A
July 23, 2024
Recent surveys from top accounting firms, Deloitte and KPMG, demonstrate that companies are increasingly focused on ESG-related disclosure and reporting.
- CREFC’s 2024 Sustainability Survey, specific to the CRE finance industry, also shows that nearly 88% of respondents have or are developing a sustainability framework.
According to Deloitte’s survey, nearly 75% of public companies anticipate investing in new technology to help improve their ESG disclosure capabilities over the next year. Data quality remains the top challenge with respect to reporting.
- Survey respondents included 300 executives, among them senior finance, accounting, sustainability, and legal professionals, at publicly owned companies with revenue of at least $500 million.
Furthermore, according to KPMG, respondents to a recent survey (600 active dealmakers from 35 geographies) report an increased importance of ESG due diligence over the past 12 to 18 months:
- 80% indicate that ESG considerations are on their M&A agenda;
- 45% of surveyed investors share that a material ESG due diligence finding had significant deal implications; and
- 55% of survey respondents are willing to pay a premium of between 1-10% for assets with high ESG maturity.
The bottom line: While Federal regulation such as the Securities and Exchange Commission’s (SEC) climate reporting requirements face serious challenges, a focus on sustainability continues to move forward at the corporate level.
Additionally, as Sustainable Fitch reports, “individual states have stepped in and now play a significant role:"