Impact of integrating ESG and financial data on corporate performance

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According to the latest study published by Workiva, sustainability regulations are driving the transformation of corporate information.

Companies plan to voluntarily comply with the CRSD directive

According to Workiva's third annual 2024 ESG Practitioner Survey, 76% of European companies not subject to the European Corporate Sustainability Reporting Directive (CSRD) intend to partially or fully align their sustainability reporting with its requirements. "The adoption of the CSRD was a watershed moment, marking the first major regulation calling for integrated financial and sustainability reporting with third-party assurance. Today, as companies around the world prepare to publish their first mandatory CSRD reports in 2025, we see the impact of CSRD extending far beyond those subject to regulation," says Paul Volpe, Senior Vice President of Growth Solutions at Workiva. CSRD has started a global shift towards assured reporting integration, with business leaders recognizing the market demand for contextual, transparent and credible data that meets stakeholder expectations.

Professionals believe that the integrated report has a positive impact on performance

Across all disciplines, respondents almost unanimously cite compliance with new mandates as the most pressing challenge facing reporting teams, and the volume of requirements they face as their main compliance concern. However, the majority of professionals also attest to the value of reporting, with 86% of European respondents, including 89% of the French, acknowledging that having a robust ESG reporting program will give their organization a competitive edge.

For 81% of European respondents, including 84% of the French, the integration of financial and sustainability data enables better decision-making that can improve a company's financial performance, and 91% of the French (versus 87% at European level) believe that integrated reporting will have a positive impact on a company's long-term value creation, reflecting similar sentiments expressed by institutional investors in Workiva's integrated " Executive Benchmark 2024 " report. What's more, 87% of European respondents (86% of French) agree that obtaining assurance on ESG data increases the likelihood of a company achieving its objectives.

"What struck me about the 2024 ESG Professionals Survey is that regulation serves as a catalyst for innovation. Companies are seizing the opportunity to improve their sustainability disclosures, making guaranteed integrated reporting the gold standard of corporate reporting," says Paul Dickinson, member of Workiva's ESG Advisory Council and founding chairman of the CDP. It's a testament to the adaptability of specialists as we enter a new era of corporate transparency. However, the survey also revealed that while the majority of respondents are confident in their data, regulation poses significant barriers to their teams."

An overwhelming 83% of global survey respondents recognized that collecting accurate data to meet CSRD requirements will be a challenge for their organization. The survey results suggest that professionals expect regulation to increase the complexity of sustainability reporting, and that reporting processes must evolve to meet new regulatory requirements.

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ESG reporting a necessity for demonstrating company performance

Professionals are turning to technology to simplify reporting processes, particularly by adopting solutions that take advantage of generative AI. More than eight out of ten agree that generative AI will make their jobs easier (81% at European level and 84% for French respondents) and sustainability reporting more effective (85% globally) over the next five years.

In the short term, around nine out of ten professionals say their companies plan to allocate more budget to technology for sustainability initiatives over the next three years (90% at European and French levels), and are investing in technology to improve collaboration between reporting teams (92%). This makes sense, given that 78% of global respondents now say that three or more internal teams are involved in their company's ESG reporting processes, compared to 71% in the 2023 ESG Practitioner Survey, and 85% recognize that integrating finance, sustainability and compliance processes allows individuals to spend more time on value-added tasks.

For Paul Volpe: "Integrated reporting is more than a compliance issue, it's a necessity for demonstrating performance and value in a competitive landscape. Business leaders and their teams understand that this is a transformational opportunity that requires serious commitment, and they are preparing to invest in integrated reporting across business lines, accessible to all stakeholders and fueled by innovation."

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