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:"

“Rules being proposed in the states of Illinois and New York are positioned to expand mandatory climate disclosure requirements to thousands of U.S. entities and entities doing business in the U.S., beyond what has already been achieved since the passing of California’s climate rules.”

CREFC’s Sustainability Initiative continues to closely track sustainability-related regulatory developments at the Federal and, where significant, state levels.

Please contact Sairah Burki (sburki@crefc.org) with any questions.

Contact 

Sairah Burki
Managing Director, Head of Regulatory
Affairs & Sustainability
703.201.4294
sburki@crefc.org
green disclosure
The information provided herein is general in nature and for educational purposes only. CRE Finance Council makes no representations as to the accuracy, completeness, timeliness, validity, usefulness, or suitability of the information provided. The information should not be relied upon or interpreted as legal, financial, tax, accounting, investment, commercial or other advice, and CRE Finance Council disclaims all liability for any such reliance. © 2024 CRE Finance Council. All rights reserved.

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