ESG Today reports that among the biggest challenges for public companies when it comes to sustainability reporting sits the quality of the data that is being turned in for the report. Deloitte surveyed 300 executives, including accounting and sustainability managers, from publicly-owned companies that have individual revenues of at least 500 million USD. These companies work in industries such as consumer products, oil & gas and technology.

According to the report, 99% of the companies prepare themselves for increasing disclosure requirements, following the release of new reporting standards in different regions, such as EU's CSRD, for example. One of the main ways companies prepare for stringent ESG reporting standards is the formation of cross-functional ESG teams, as 52% of respondents say that their organizations already have these teams in place, while 46% are working on developing these teams.

The formation of such teams within a company has great implications for how sustainability is perceived and how fast a company can make progress in this regard. Compared to 98% of the companies that reported they made some progress towards sustainability over the past year, organizations with cross-functional teams (38% of the surveyed ones) reported significant progress towards more sustainable practices. By contrast, only 10% of the companies that don't have such teams reported important progress towards green models.

At the same time, 92% of the companies are now taking extra steps to stay ahead of the game when it comes to ESG reporting and 52% of those that have cross-functional teams are taking big steps towards that goal, whereas only 24% of traditional organizations manage this.

In spite of the fact that organizations made investments in ESG reporting tools and technologies, the quality of the data is still cited as one of the biggest challenges when it comes to reporting and 88% of the companies say that this challenge sits among the first three big ones.

Kristen Sullivan, Audit & Assurance Partner, Sustainability and ESG Services at Deloitte & Touche LLP, said that "the creation of dedicated ESG teams, the rise in specialized roles, and investments in sustainability reporting, all indicate a strategic shift toward embedding sustainability into their core operations. While challenges still exist, the commitment to sustainability is becoming more evident as companies continue to unlock the potential of ESG insights."