World's Busiest Paper Industry Committed to Sustainability

World's Busiest Paper Industry Committed to Sustainability

In a recent study by KPMG, six key trends in sustainability reporting have emerged, highlighting the growing importance of environmental, social, and governance (ESG) practices in businesses worldwide.

1. Strong Market-Driven Momentum Despite Regulatory Ambiguity

Despite regulatory ambiguity, about 74% of companies have indicated that their sustainability reporting plans under regulations like the EU's Corporate Sustainability Reporting Directive (CSRD) remain unchanged. This shows that market demand is pushing ESG reporting forward, even without fully settled regulation.

1. Acceleration in ESG Reporting and Assurance with Purposeful Intent

ESG reporting is not just increasing in volume but becoming more intentional and focused on decision-useful, high-quality disclosures that bring consistency and comparability. This trend reflects a shift towards more meaningful and standardised reporting.

1. Expansion in Adoption of ISSB and IFRS Sustainability Disclosure Standards Worldwide

The ongoing global adoption of International Sustainability Standards Board (ISSB) and International Financial Reporting Standards (IFRS) sustainability disclosure standards by 36 jurisdictions reflects a trend toward standardized sustainability disclosure frameworks that enhance comparability and credibility.

1. Increased Integration of Sustainability into Board and Executive Decision-Making

Surveyed companies show growing involvement of senior executives and board members in ESG reporting and assurance, reflecting its rising strategic importance. This trend underscores the increasing recognition of ESG as a critical component of business strategy.

1. Materiality and Risk Management Taking Center Stage

Companies are applying more judgment in assessing material sustainability risks and opportunities tailored to their specific facts, value chains, and stakeholder needs, guided by frameworks like IFRS S1. This trend emphasises the need for businesses to understand and manage their sustainability risks effectively.

1. Diverse Sectoral Progress and Strategic Recalibration by Major Companies

While some industries advance confidently with ESG efforts, others are still early in the process. Notably, some large U.S. companies have temporarily scaled back sustainability reporting in 2025 as part of strategic adjustments, indicating evolving approaches rather than abandonment.

These trends collectively illustrate that sustainability reporting is maturing into an integrated, globally standardized, and strategically significant practice, driven by both regulatory developments and market demands.

The research analysed documentation from 5,800 companies in 58 countries and jurisdictions, including data on the top 100 companies in individual countries analysed and the top 250 companies worldwide by revenue.

• 56% of the companies surveyed have a sustainability manager.
• Almost half of the European companies in the research have already reported the indicators required by the EU Taxonomy.
• 41% of Global Fortune 250 companies have linked the remuneration of top management to sustainability objectives.
• Healthcare companies are the least likely to report on sustainability, with only 67% of N100 groups conducting this type of reporting.
• Among the top 100 companies (N100), 79% report on sustainability, as was the case two years ago.
• 95% of the top 250 companies worldwide by revenue publish carbon emission reduction targets.
• For the top 250 companies (G250), 96% are engaged in ESG and sustainability reporting, consistent with the figures from 2020 and 2022.

The forestry and paper sector is the most active in reporting for the N100 (89%), followed by the automotive sector (86%) and utilities (85%).

The EU's CSRD will be applied to an initial group of companies for financial years ending December 31, 2024, and will be expanded to other entities within its scope by 2029. Some companies have already modified their reporting practices in anticipation of mandatory sustainability reporting under the EU's CSRD. The directive will require companies to disclose information about their impact on the environment, human rights, and social issues, among other things.

These findings underscore the growing importance of sustainability reporting and the need for businesses to adapt their practices to meet evolving regulatory and market demands.

Further Emphasis on Climate-Change and Environmental Science in Business

Many companies are starting to link the remuneration of top management to sustainability objectives, highlighting the growing prominence of environmental science and its role in business strategy.

Finance and Businesses Prioritizing Environmental Science in Reporting

A significant number of companies, especially from the Global Fortune 250, are publishing carbon emission reduction targets, showcasing the finance industry's increasing focus on environmental science and climate-change.

Environmental Science Integration Across Industries

Some industries, such as forestry and paper, automotive, and utilities, are leading the way in sustainability reporting, demonstrating the widespread integration of environmental science into various business sectors.

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