KPMG: Oil Firms to Spend More on ESG, Execution Plans Unclear

Most companies plan to spend more on Environmental, Social and Governance  (ESG) activities within the next three years, but are less sure about how to execute those strategies, a report published by KPMG, has stated.

Driven by reporting and shareholder demands, 90 per cent of the 550 companies responding to the survey said they will invest more in  ESG capabilities in the next three years.

According to Bloomberg, respondents represented multiple industries such as energy, financial services, technology, healthcare and transportation.

The main increases in ESG spend in the next three years will be through adding dedicated ESG personnel, software, and more employee training and education, among other steps, respondents said.

However, the “Addressing the Strategy Execution Gap in Sustainability Reporting” survey report found “a clear disconnect” between strategy and execution, with just 33 per cent of companies having restructuring plans to align sustainability goals with business strategy.

Top challenges cited by companies included insufficient resources, collaboration or communication, divergent priorities, difficulty measuring return on investment and budget constraints.

Additionally, while 83 per cent of companies considered themselves ahead of their peers on ESG reporting, 47 per cent still use spreadsheets to manage ESG data, and only 18 per cent use third-party verification sources.