Environmental, social and governance (ESG) related topics are reshaping business 
operations, performance measurement, and risk management, introducing both 
new challenges and opportunities. It’s within this context that we are pleased to 
launch KPMG’s inaugural ESG Assurance Maturity Index, developed to help inform 
companies, investors and wider stakeholders on the current landscape. It comes 
at a pivotal time, as companies globally undertake a critical journey to prepare for 
new ESG regulatory requirements.
Most companies are already doing some reporting 
on ESG topics, primarily on a voluntary basis. But 
now the rules and market demands are changing, 
and what was once done at a company’s 
discretion is now becoming mandatory and 
subject to independent third-party assurance. 
Time is of the essence as sustainability reporting 
frameworks come into force.1
To gain investor and stakeholder confidence and 
mitigate the risk of greenwashing, ESG reporting 
should be subject to a level of scrutiny 
comparable to the financial information that users 
depend on. This means that companies need to 
invest in and improve data quality by applying 
disclosure control and risk frameworks akin to 
those used in financial reporting.
The impending regulatory requirements are 
unquestionably driving the urgency to become 
ready for ESG assurance, but that is just part of 
the story. As our Index and research show, the 
potential benefits to becoming assurance ready go 
beyond mere compliance. Stakeholders from 
investors to employees to society as a whole 
want to know more about how companies are 
operating in a sustainable way. This has been the 
impetus for the regulatory action but assuring ESG 
data can more broadly contribute to a company’s 
reputation. The rigor and processes required to 
obtain ESG assurance can improve operations 
through accurate insights for decision-making, risk 
management and efficiency gains. 
The KPMG ESG Assurance Maturity Index and 
associated research are designed to offer a path 
forward and provide a roadmap with guidance on 
areas to focus on, and the steps to take to 
become ready for ESG assurance. 
KPMG professionals are right there on the journey 
with you. We are operationalizing ESG across our 
global organization to ensure our KPMG firms’ 
ESG assurance work is performed to the same 
consistent level of rigor and quality as our financial 
audit activities and benefits from the same 
advanced technology platform. We recognize that 
your stakeholders are broader than just investors, 
and as auditors it is the responsibility of KPMG 
firms’ to serve the public interest and keep the 
public’s trust.
We hope you gain fresh insights from our Index.
Larry Bradley
Global Head of Audit
KPMG International
Mike Shannon
Global Head of ESG Assurance
KPMG International
Foreword
1 KPMG has extensive insights on all the developments in sustainability reporting: ESG Reporting — KPMG Global
Road to readiness  |  2
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Executive summary
05
ESG assurance: The beginning of the road
06
What’s driving the ESG assurance imperative?
09
Benefits of assuring ESG data go far beyond compliance
10
Challenges persist as companies prepare for ESG assurance
12
Five steps to help you become ready for ESG assurance
14
Preparing for ESG assurance — how to move forward
21
Glossary
22
Table of contents
1.	 Determine applicable ESG reporting standards
2.	 Build robust ESG governance and develop the right skills
3.	 Identify the applicable ESG disclosures and data requirements 
across functions
4.	 Digitize ESG data processes and ensure high quality data
5.	 Work with the value chain to collect ESG information
Road to readiness  |  3
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About KPMG’s ESG Assurance Maturity Index
Each pillar is supported by one or more questions from the survey. The scores from each question within a pillar 
were averaged to arrive at the overall score for the pillar. The pillar scores were then weighted as follows: 
*Survey respondents were originally asked about ‘supply chain’ but as this area develops, supply chain is 
now being thought of as ‘value chain’ so we have updated our language to align with current terminology.
KPMG surveyed senior executives 
and board members with ESG 
reporting and assurance knowledge at 
The KPMG ESG Assurance Maturity Index is composed of 
designed to help companies 
measure progress in each 
of these areas:
(1) governance, (2) skills, (3) data management, (4) digital 
technology, and (5) value chain*.
across industries, global 
regions, with a mean revenue of 
US$15.6B.
750 companies
Governance
0.25
Skills
0.25
Data 
management
0.25
Digital 
technology
0.15
Value 
chain*
0.10
Five pillars
The Index, measured on a basis of 0−100, examines the progress companies have made in these areas to 
gauge the relative maturity of a company’s ESG reporting program in order to assess its assurance readiness.
Research was conducted between April — June 2023.
Based on their rankings, companies are classified as 
Leaders
(the top 25th percentile)
Advancers
(the next 50th percentile)
Beginners
(the bottom 25th percentile)
Road to readiness  |  4
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Executive summary 
66%
65% 
Only 27% 
58%
Only 26% 
Only 25%
Five steps to help you become 
ready for ESG assurance
Benefits of having your 
ESG data assured*
Determine applicable ESG reporting 
standards
1.
Build robust ESG governance and 
develop the right skills
2.
Identify the applicable ESG disclosures and 
data requirements across functions
3.
Digitize ESG data processes and ensure 
high quality data
4.
Work with the value chain to collect 
ESG information
5.
of respondents say their firms 
must now report ESG data or 
will be required to soon.
of companies have robust policies 
and procedures to support the 
development of their ESG disclosures.
say it is challenging to balance 
ESG assurance goals with 
the profit expectations of 
shareholders.
Of those least ready 
for ESG assurance,
of leaders see digital tools 
as key to being ready to 
obtain ESG assurance.
of companies feel they have the ESG 
policies, skills, and systems in place to be 
ready for ESG assurance.
of companies have a clear 
audit trail to support their 
non-financial information.
56%
54%
Greater market 
share                     
Improved 
profitability
52%
52%
Reduced 
interventions          
Better decision 
making
49%
47%
Greater 
innovation
Stronger 
reputation                    
46%
44%
Greater 
shareholder value
Reduced  
costs                                 
*Benefits cited by Leaders in the KPMG ESG Assurance Maturity Index
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Road to readiness  |  5

The KPMG ESG Assurance Maturity Index found 
that the majority of companies are still at the 
beginning of their ESG assurance journey and not 
ready to have all of their ESG data independently 
assured. While the top 25 percent of companies 
surveyed are characterized as “Leaders”, this is very 
much a relative designation. Leaders in the research 
are those that have achieved an average Index score 
of 64.8 (on a scale of 0–100) while Advancers saw 
an average score of 45.4, with 30.5 being the 
average score for Beginners. The research shows 
that although Leaders are more advanced in 
becoming ESG assurance ready, for the most part 
they still have a lot of work to do.
The correlation between company size and ESG 
assurance maturity is evident, with larger 
companies showing greater integration of 
sustainability into their day-to-day operations. The 
largest firms, with revenues exceeding US$10B, 
achieved an average score of 56.3, notably higher 
than US$5–10B companies (45.3) and those 
under US$5B (41.7). Publicly traded companies, 
on average, displayed higher ESG assurance 
maturity than privately held companies, with 
scores of 48.5 and 43.3.
On an average basis the Index shows only a 
moderate difference in maturity according to 
industry. However, larger differences among 
industries emerge when viewed by the 
percentage of Leaders in each, as shown in  
Figure 1, Energy and Natural Resources, as well 
as Asset Management & Real Estate firms have a 
33 percent share of Leaders compared with just 
14 percent of Life Sciences and Healthcare 
organizations, for example.
of companies surveyed are in early stages of 
ESG maturity and therefore, less ready for 
ESG Assurance.
75%
Assurance requirements are here. Soon, third-party assurance 
will no longer be a nice to have; it will be table stakes. While 
there are some larger companies that have been working to get 
ESG assurance ready, most companies haven’t built out much 
of the infrastructure that they need to have their ESG data 
assured. Now is the time for companies to establish their 
processes and become assurance ready.
Maura Hodge  
ESG Audit Leader, KPMG in the US
ESG assurance: The 
beginning of the road
Leaders
64.8
0
100
Beginners
30.5
Advancers
45.4
Road to readiness  |  6
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Where a company is headquartered has a bearing on 
their assurance readiness. Companies in North 
America average the highest maturity score followed 
by Europe, Asia Pacific and Latin America. 
By country, ESG assurance readiness of companies 
is relatively close between the highest-ranking 
countries — France (50.4), Japan (50.0) and the 
US (49.4) and the lowest-ranking — Brazil (43.1) and 
China (43.0).
However, when examined by the percentage of 
Leaders, wider differences are evident. Thirty-eight 
percent of firms in Japan are Leaders, compared 
with just 18 percent in Canada, the UK and Brazil, 
for example.
Figure 1: Index score and percent of Leaders by industry
Figure 2: Maturity score by 
headquarters region
48.3
46.8
45.8
43.1
North America
Europe
Asia Pacific
Latin America
50.7
49.1
48.8
47.7
47.5
47.0
46.0
44.6
42.4
Life
Sciences & 
Healthcare 
Technology 
& Tele-
communications
Infrastructures
Asset 
Management/
Real Estate
Insurance
Consumer
& Retail
Banking
Manufacturing
Energy & 
Natural 
Resources
Index score
% of Leaders
33%
29%
30%
18%
27%
33%
32%
22%
14%
Road to readiness  |  7
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Japan emerged as a leading country in the Index, 
attributed to several key factors. Japanese 
companies have traditionally placed a higher 
emphasis on generating societal and stakeholder 
value compared to their counterparts. This mindset 
is evident in their issuance of integrated reports and 
their significant representation among Taskforce of 
Climate Related Financial Disclosures (TCFD) 
adopters worldwide.
Additionally, Japanese public companies must 
incorporate sustainability information into a 
dedicated section of their annual securities report, 
effective beginning fiscal years ended March 31, 
2023.2 This action by Japan‘s Financial Services 
Agency signals an aim to implement national 
sustainability reporting standards in line with IFRS 
Sustainability Disclosure Standards. This 
development has sparked discussions on 
assurance of ESG information, prompting 
companies to actively seek ways to bolster the 
credibility of their sustainability data while 
improving their disclosure approaches.
Figure 3: Maturity score and percentage of Leaders by country
2	Japan introduces mandatory ESG disclosures for public companies‘, Morgan Lewis, December 22, 2022.
As sustainability-related information is 
increasingly integrated into financial analysis 
of investors, companies should seriously 
consider how to ensure sufficient data 
quality. This should also improve the quality 
of the compass that management would rely 
on, in driving the journey of sustainability 
transformation. 
Tomokazu Sekiguchi 
Partner, Head of Department of Professional Practice, 
Disclosure 
KPMG in Japan
France
Index score
% of Leaders
Japan
US
Netherlands
Canada
Germany
UK
Brazil
China
Australia
32%
38%
31%
31%
18%
21%
18%
22%
18%
22%
50.4
50.0
49.4
47.5
46.9
45.3
44.9
44.5
43.1
43.0
Road to readiness  |  8
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of the business leaders surveyed said 
their companies must report ESG data 
now or will soon be required to do so; 
the percentage is even higher, 
78 percent, for listed companies.
Two-thirds
What’s driving the ESG 
assurance imperative?
There are a number of drivers leading companies 
to report and increasingly assure their ESG data, 
but regulatory pressure is clearly number one. 
Two-thirds of the business leaders surveyed said 
their companies must report ESG data now or will 
soon be required to do so; the percentage is even 
higher, 78 percent, for listed companies. At the 
same time, a solid majority, 64 percent, say they 
are feeling regulatory pressure to obtain assurance 
over their ESG disclosures. The higher a 
company’s revenue, the more likely that it will be 
required to report ESG data.
ESG reporting and 
assurance frameworks 
are changing so 
significantly, even 
companies that are 
mature and have been 
doing assurance in some 
areas are unlikely to say 
they are truly ready for 
ESG assurance.
Neil Morris  
Global Head, Assurance and 
ESG Methodology 
KPMG International 
Not surprisingly, more publicly listed companies 
will be required to report ESG data compared to 
privately-held ones, yet the results of the survey 
indicate that obtaining assurance on ESG 
information is quickly moving from a competitive 
advantage to a stakeholder expectation, making it 
de facto mandatory, even when regulations might 
not require it.
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Road to readiness  |  9

companies approach ESG assurance not 
merely as a box-checking exercise, but 
as a way to create value for their 
organization. 
Forward-thinking 
Benefits of assuring ESG data 
can go far beyond compliance
With increasing regulatory requirements, being 
assurance ready can be viewed as table stakes, 
but done right, it can also yield significant 
business benefits. Preparing for the rigor of the 
assurance process means producing higher 
quality data and information. It can identify gaps 
and areas where processes can be improved, with 
potential ways to gain efficiencies in collecting 
and reporting data.
Assured ESG data helps to give companies greater 
credibility with investors and all stakeholders 
potentially increasing brand loyalty, which once lost 
can be difficult and expensive to win back. More 
than half of all respondents (54 percent) and  
47 percent of CEOs and board members look 
beyond just compliance and see gaining greater 
market share as a potential benefit, attracting 
ethically minded customers and investors seeking to 
align their values with their choices. A range of other 
potential benefits highlighted in our research are 
increased customer satisfaction (46 percent) and, 
greater innovation (49 percent), with a significant 
number, 44 percent, also citing decreased costs 
(e.g. operational costs), investment/asset 
optimization, and stronger reputation.
Leaders in the Index, who are further along the 
assurance journey, see potential benefits in having 
their non-financial data assured where Beginners 
do not yet fully appreciate all the opportunities. 
Over half of Leaders, 54 percent, see the 
opportunity to improve profitability, by, for 
example, resource optimization and waste 
reduction, while just 22 percent of Beginners see 
this potential benefit. A similar percentage of 
Leaders, 52 percent, see improved decision 
making as a benefit of becoming ESG assurance 
ready, compared to 30 percent of Beginners.
There is an initial cost to 
becoming ESG assurance 
ready, but one of the potential 
benefits is that it allows the 
company to show how they 
will operate not only 
profitably in the long-term, 
but also sustainably, in a 
much more credible way.
George Richards 
Partner 
Head of ESG Reporting and Assurance  
KPMG in the UK
Road to readiness  |  10
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Figure 4. Areas where leaders and beginners see benefits in having their ESG 
data assured. 
56%
54%
52%
49%
47%
46%
22%
30%
43%
40%
15%
46%
Greater market share/expanded client base
Improved proﬁtability
Improved decision-making
Greater innovation/new business models
Stronger reputation
Greater shareholder value/attracting investors
Leader
Beginner
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Road to readiness  |  11

Challenges persist as companies 
prepare for ESG assurance
Of the 56 percent of firms that are reporting ESG 
data in the public domain, 93 percent are doing 
some level of external assurance. Yet, of those, 
just a fraction are obtaining reasonable assurance  
(14 percent) or limited assurance (16 percent) 
over all of their ESG disclosures that will be 
required under incoming regulations, signaling 
that there is still more progress to be made on 
their ESG assurance maturity journey.
The Index reveals that companies are 
experiencing a range of challenges in preparing  
for ESG assurance. These hurdles run the gamut, 
from lack of skills and insufficient budgets to 
unclear, evolving regulations and inadequate 
digital solutions and data access. 
On average, beginners cite between four and five 
main challenges; leaders report fewer, about three 
to four. However, some hurdles grow as companies 
become more mature in ESG assurance.  
ESG assurance contributes to 
transparency and helps 
reduce the risk of 
unintentional green or social 
washing.
Sarah Bagnon-Szkoda  
Partner in charge 
ESG Department of Professional Practice 
KPMG in France
Figure 5. Top six challenges in preparing for ESG assurance
For instance, as leaders strive to do better, they 
become more aware of weaknesses in supplier 
ESG practices and gaps in current metrics.
44%
42%
44%
42%
39%
High initial 
costs/
inefﬁcient
budget 
Lack of internal
skills and
experience
Lack of clarity/
evolving
regulations
Inadequate
supplier ESG
performance 
Insufﬁcient IT/
digital solutions 
36%
Lack of clear
metrics/
measurement
tools
Road to readiness  |  12
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Data collection and reporting are lagging 
In order to be ready for assurance, a company needs 
to be in control of its data. Collecting and reporting 
required data is one of the main hurdles for most 
companies. There are typically inconsistencies in 
how data is gathered and reported across 
organizations, with companies needing to make 
estimates to fill in the gaps. The extensive data 
requirements of the forthcoming EU regulations will 
require reporting not only on environmental criteria, 
but also on a broad range of social factors, including 
diversity and inclusion, working conditions and 
health, putting further pressure on companies. 
Unlike financial data, which typically resides in a 
relatively small number of interconnected systems, 
ESG data may need to be collected from a plethora 
of disparate systems that have not been designed 
to interact with each other. For example, there 
could be a standalone system for measuring carbon 
emissions that doesn’t support social or health and 
safety metrics. So, a metric such as carbon 
emissions per headcount or hours worked can’t be 
determined easily.
Our research identified several areas where 
companies are lacking with respect to data capture. 
Just over half of companies capture data on scope  
1 and 2 greenhouse gas (GHG) emissions and waste, 
and only 36 percent of companies are capturing 
scope 3 GHG emission data. 
Fewer than half say their companies capture data on 
other ESG performance metrics, including impact of 
workforce diversity and inclusion employee 
retention, and pay equity. The lack of data capture on 
these social metrics suggests that many companies 
have yet to fully integrate these considerations into 
their business strategies. This disconnect highlights 
the gap between societal expectations and corporate 
actions. To bridge this gap, companies need to 
transparently collect and report data on diversity, 
retention, and pay equity, demonstrating their 
commitment to addressing these vital social issues. 
As awareness of the importance of climate risks and 
other ESG metrics grows and as regulatory and 
market pressures increase, more companies are 
likely to prioritize and improve their data collection. 
And for many in the coming years, these metrics will 
be required for companies not only to report on, but 
also to get assured.
Data quality-checking is also lacking
Just as it is essential to collect the right data, it is 
equally important to ensure the quality of the data. 
Our research finds that necessary quality-checking 
falls short for many companies. Close to half, 
44 percent, of companies surveyed rely on the staff 
manager preparing the ESG data, that person’s line 
manager, or the manager of the report to check the 
accuracy of the data.
Of the 56 percent of firms reporting ESG data in the 
public domain, 53 percent test their process and 
controls for ESG data on a rotating basis, and far 
fewer, 22 percent, do annual testing of process and 
controls over all performance metrics. And while 
banking is the leading industry in this regard, only  
40 percent of those doing testing are doing 
comprehensive yearly testing.
Despite the challenges, many companies recognize 
that assurance enhances credibility and transparency, 
instilling trust among stakeholders, investors, 
customers, and regulatory bodies. This fortified trust 
is critical in an era where ethical and sustainable 
practices are integral to business success.
Figure 6: Percentage based on companies doing testing
How controls are tested
All
Industry high
Industry low
Process and controls are tested over high-risk 
performance metrics only.
25%
43% Manufacturing
18% Infrastructure
Process and controls are tested on a rotating 
basis, including high risk performance metrics 
each year.
53%
70% Asset 
Management 
& Real Estate; 
Consumer & Retail
20% Banking
Process and controls are tested over all 
performance metrics every year.
22%
40% Banking
10% Asset 
Management  
& Real Estate 
Consumer & Retail
of those doing testing are doing 
comprehensive yearly testing.
Only40%
Road to readiness  |  13
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Five steps to help you become 
ready for ESG assurance 
Becoming ESG assurance-ready requires a multi-dimensional approach. An effective strategy includes a 
number of key components. These are the first important steps to address on your ESG assurance journey:
Determine applicable ESG 
reporting standards
1.
Build robust ESG governance and 
develop the right skills
2.
Identify the applicable ESG disclosures 
and data requirements across functions
3.
Digitize ESG data processes and 
ensure high quality data
4.
Work with the value chain to 
collect ESG information
5.
Determine applicable ESG 
reporting standards 
Sustainability reporting is developing quickly, with new 
requirements from the International Sustainability 
Standards Board (ISSB) and EU, and proposals from 
the US. The aim of the ISSBTM Standards is to create a 
global baseline for investor-focused sustainability 
reporting that local jurisdictions can build on.
There is commonality among the requirements, 
however, there are also areas where they are not 
aligned. For multi-nationals and others needing to 
apply multiple frameworks, the challenges will be 
magnified if the requirements are not compatible. 
KPMG has guidance on some of the practical 
challenges you may encounter as you prepare for the 
new sustainability reporting standards. Comparing 
sustainability reporting requirements — KPMG Global.
1.
Road to readiness  |  14
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Board and CEO engagement is critical to ensure 
that data and processes are robust and ready for 
assurance. For most companies, the ESG agenda 
has become a priority for CEOs, essential to 
attracting the best people, and in ensuring the 
budget, systems and processes required. 
Meanwhile, for boards of directors, especially with 
large listed companies, increasing ESG reporting 
and assurance requirements are demanding their 
attention. 
As expected, ESG is on the board agenda for 
about three-quarters of companies surveyed 
overall. This includes, reviewing ESG data, taking 
ESG actions, monitoring ESG performance, and 
identifying ESG risks/opportunities. The Leaders 
have even greater board engagement, exceeding 
80 percent in all of these areas. 
 
Digging a little deeper, the research reveals there 
still can be challenges at the board and CEO level, 
with Leaders in assurance readiness holding a clear 
advantage. Over half of Leaders (54 percent), say 
their board is knowledgeable about their company’s 
ESG assurance issues, compared to 27 percent of 
Advancers/Beginners. A slightly lower percentage 
of Leaders, 39 percent, say ESG transparency is a 
top priority for their C-suite and board, compared 
with 23 percent of non-leader respondents.
Leaders are also doing a better job of getting 
shareholders on-board with ESG assurance efforts. An 
impressive 82 percent of Leaders don’t think achieving 
ESG assurance goals while meeting shareholder profit 
expectations is a challenge. By comparison, 51 percent 
of CEOs and board members surveyed at companies 
that are less ready for assurance say it is challenging to 
balance their ESG assurance goals with profit 
expectations of shareholders.
Build robust ESG governance and develop the right skills
2.
Where CEO and board sign-off is required, it inherently 
enhances the comprehensiveness and precision of ESG data. 
This step is pivotal in achieving readiness for assurance — 
when you‘re in a position for your CEO and board to provide 
their endorsement, you‘re also better prepared for your 
assurer to sign-off.
Sebastian Soares  
Partner, Assurance Leader, KPMG in Brazil and South America region
Figure 7: C-Suite and board views on ESG assurance
Leader
Advancers/
Beginners
Our board of directors is knowledgeable about the ESG assurance 
issues facing the organization.
54%
27%
ESG transparency is a top priority for our C-Suite and board of 
directors.
39%
23%
It is challenging to achieve ESG assurance goals while meeting 
shareholder profit expectations.
18%
51%
Road to readiness  |  15
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Having a team with the right skills is critical 
The CEO and board play a pivotal role in cultivating 
an ESG-focused culture, setting clear goals, and 
communicating their significance throughout the 
organization. Even so, the personnel demands of 
becoming assurance ready bring a unique set of 
challenges. Generally, the underlying ESG data 
owners will have operational roles within the 
business, while the reporting process will be 
owned by the finance function.
There is a significant advantage to have people 
with the skill set to prepare financial information 
and statements and manage an audit. At the same 
time, they will need to have a depth of 
understanding to navigate the ESG content and 
metrics they are trying to assure.
Our research found the vast majority (82 percent) 
of Leader companies have completed or are at 
mid-implementation in setting up a team to 
manage ESG metrics and disclosures, compared to 
just 31 percent of those considered Advancers or 
Beginners.
Leaders are also ahead in providing ESG training to 
their staff, but many have more to do. Over half  
(54 percent) of Leaders provide regular training 
throughout the year, compared to 34 percent of 
Advancers and Beginners, while less than a third 
make the training compulsory with testing, still far 
more than the 7 percent of non-Leaders.
Companies that are most 
successful in becoming ESG 
assurance ready are those 
that get everyone in the 
company on board with the 
mission, creating a culture 
that appreciates the 
company’s impact on the 
environment and society and 
the value that ESG reporting 
can bring.
Ubbo van Zessen  
Partner  
Head of ESG  
KPMG in the Netherlands
Figure 8: Frequency of staff ESG training
ESG training frequency for staff
Leader
Advancers/
Beginners
Never
-
1%
Ad hoc
2%
7%
Annually
15%
52%
Regularly throughout the year
54%
34%
Regular compulsory training with testing
29%
6%
Road to readiness  |  16
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Data management is crucial to becoming ESG 
assurance ready. There are three main components:
•	 Identifying the material topics and the right metrics
•	 Implementing processes to collect the data
•	 Putting controls in place to ensure data quality
As outlined on page 14, the first step in capturing the 
right ESG data for assurance is determining the 
applicable reporting requirements and then 
determining what the right metrics are for your 
business. Metrics need to be clearly defined and 
documented. Performing a materiality assessment 
will help define KPIs and ESG metrics, so that there 
can be an assurance opinion that the metrics have 
been measured and reported in accordance with your 
reporting criteria.
Companies obtaining assurance under the EU 
reporting requirements should perform materiality 
assessments for two dimensions (Double 
materiality) — financial and impact; and assure 
disclosures in either dimension. For example, under 
‘impact’, the assessment would include a 
company’s upstream and downstream value chain, 
with materiality assessed based on severity and 
likelihood of the impact. While ‘financial’ materiality 
will require disclosure of sustainability-related 
matters that (may) trigger material financial effects 
on a company, with materiality assessed based on 
the likelihood and (potential) size of the financial 
affect. In the case of financial materiality, the 
assessment will not be limited to matters within the 
company’s control.
Most companies in our research have made progress 
in defining key performance indicators and collecting 
and reporting KPI data both internally and externally, 
but Leaders stand out, with more than  
90 percent making moderate or significant progress 
in these areas.
For capturing data, nearly half, 45 percent, of Leaders 
recognize the value of having a custom ESG reporting 
management system, compared to just 9 percent of 
Beginners and Advancers. For the majority,  
Identify the applicable ESG 
disclosures and data requirements 
across functions
3.
56 percent of all companies have an integrated 
governance, risk, and compliance (GRC) system that 
combines ESG matters and ensures they are 
managed together with performance updates and 
presented to management.
Building effective processes and controls
To obtain ESG assurance, whether limited or 
reasonable, it’s essential to have robust data 
processes, controls and systems. This ensures 
companies can prevent the need to restate data from 
one reporting period to another. It also safeguards 
against regulatory scrutiny and perceptions of 
misleading claims (greenwashing). Leaders are well 
ahead of others in this regard. 
On average, Leaders ranked higher for progress on 
processes and controls for ESG data. Most notably, 
Leaders rank more than three times higher than other 
respondents for having process and controls 
documented, in place and tested for environmental 
data; with similar leadership for governance data and 
social data. 
However, as our research suggests, the vast majority 
of companies may still have more to do to create 
systematic processes for data collection, validation, 
and verification. Standardizing procedures across 
departments, utilizing digital technology and 
maintaining a centralized documentation repository, 
while conducting regular tests to ensure data 
accuracy will become even more critical for some 
companies due to greater regulatory requirements or 
other stakeholder pressures. 
As the regulatory landscape continues to evolve, 
companies will also need to continually enhance and 
refine their data management practices across all 
ESG dimensions.
Figure 9: Most advanced process and control stage for ESG data
Leader
Advancers/
Beginners
Process and controls 
documented, in place and tested
Environment
50%
14%
Governance
52%
19%
Social
45%
16%
of Leaders recognize the value of having a 
custom ESG reporting management system.
45%
Road to readiness  |  17
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The first thing we see as companies become assurance ready 
is the quality of their data improves significantly. This 
ultimately leads to better business decisions and a more 
informed strategy, which can be used to strengthen the 
relationship with all relevant stakeholders and potentially 
reduce financing cost. 
Oliver Geier 
Partner 
KPMG in Germany
Implementing strong internal controls and conducting regular 
reviews of ESG data can help companies proactively identify and 
address any issues, such as with accuracy and completeness, 
helping ensure the integrity of their reporting and readiness 
for assurance. 
Farah Bundeali 
Partner and National Leader 
ESG Assurance 
KPMG in Canada
Road to readiness  |  18
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Data collection is central to becoming ESG 
assurance ready. The higher the quality of the data 
and the more granular it is, the richer the insights 
and better-informed decisions that can be made. 
Companies are used to collecting detailed data on 
financial performance and metrics, but collecting 
non-financial data brings additional layers of 
complexity. With diverse sets of metrics ranging 
from greenhouse gas emissions to gender diversity 
there are typically inconsistencies and gaps in the 
way data is gathered across the organization.
Digital solutions can be valuable in addressing the data 
collection task, and virtually all, 96 percent, of the 
Leaders in our Index say they are at mid/full 
implementation of ESG data capture systems, more 
than double that of Beginners and Advancers. 
The majority of Leaders, 66 percent, agree digital 
tools are key to being ready to obtain ESG assurance, 
compared to 38 percent of the Advancers and 
Beginners. Perhaps surprisingly though, CEOs and 
board members are less convinced that these tools 
are essential — just 37 percent say they are key to 
helping them be ready for ESG assurance. This 
skepticism could stem from a lack of understanding 
of the specific benefits, concerns about costs, or 
perceptions that traditional methods are sufficient.
One of the ways to raise the maturity level for 
non-financial data collection is integrating non-
financial data capture with financial reporting 
systems. It can be a challenge with the very 
different types of information and systems in place, 
but the benefits can be significant. 
The survey finds 87 percent of Leaders have 
attained mid/full integration of their ESG data 
systems with financial reporting systems, 
compared to just 35 percent of other firms.
Di
e
4.
gitize ESG data processes and 
nsure high quality data
Integrating non-financial with financial data capture systems 
gives you the benefit of consistent financial controls over your 
non-financial information. We recommend using existing 
financial reporting tools to the full extent possible, extending 
them to encompass non-financial reporting. 
Patrick Chu  
Partner, Head of ESG Reporting and Assurance  
KPMG China
Maintaining supporting documentation for 
audit trails
Having a robust audit trail is essential to being 
assurance ready — it is what ensures the 
reliability and transparency of reported data. 
Three-quarters, 74 percent, of respondents in our 
research acknowledged they lack a clear audit 
trail to substantiate non-financial ESG information. 
The audit trail provides essential evidence that 
traces the sources of data and how specific 
information was ascertained in the reporting 
process. It encompasses structured and 
unstructured, quantitative, and qualitative data. 
With potentially hundreds of ESG data points 
getting reported and assured, achieving a clear 
audit trail is complex and demands a concerted 
effort from organizations. This involves integrating 
ESG considerations into core business 
operations, implementing rigorous data collection 
and management systems, and fostering a 
culture of accountability from top to bottom. By 
addressing this gap, companies can not only 
enhance their readiness for assurance but also 
demonstrate their genuine dedication to 
sustainable and responsible practices, earning the 
trust and confidence of stakeholders in an era 
where values and accountability hold more 
weight than ever before.
of respondents in our research  
acknowledged they lack a clear audit trail to 
substantiate non-financial ESG information.
74%
Road to readiness  |  19
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As companies grapple to get a better handle on their 
ESG data, getting data from their value chain can be 
especially challenging. It is a major issue as in many 
cases, the majority of a company’s carbon footprint 
is coming from indirect emissions across the value 
chain. There are also likely to be other sustainability 
and social information from suppliers that companies 
need to take into account.
Obtaining high-quality information from suppliers will 
only become more critical as regulations increasingly 
force companies to have their suppliers aligned.
Leaders are further along in working with their 
suppliers. More than half, 55 percent, say they have 
established broad contractual ESG requirements for 
their suppliers, while about a third, 28 percent have 
robust, product-specific contractual requirements. 
The majority of Leaders, 61 percent, ask suppliers to 
feed ESG data into their data platform.
We also expect to see increased use of alternatives, 
such as product and invoice based ESG indicators, as 
a way to bypass issues with capturing supplier data, 
but this may not ultimately meet regulatory 
requirements.
Suppliers may not feel the same level of urgency if 
they are operating in a different regulatory 
environment. They may also be challenged to provide 
information that meets the requirements of a variety 
of frameworks used by their customers. Even so, 
expect pressure on supplier to ratchet up to provide 
information required in timely manner.
Work with the value chain to collect ESG information
5.
Obtaining ESG data from 
suppliers on a timely basis 
has become part of the 
procurement process. 
Companies that are thinking 
strategically are asking how 
they can help customers meet 
their ESG goals — capturing 
the right data is a 
differentiator.
Daniel Camilleri 
Partner, KPMG Australia
Road to readiness  |  20
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Preparing for ESG assurance — 
how to move forward
This is a pivotal time for companies as they 
undertake their journey to prepare for ESG 
assurance. Regardless of the level of assurance, it 
doesn’t alleviate any of the responsibilities to report 
accurate information; Limited assurance doesn‘t 
equate to limited reporting; accuracy remains 
paramount.
The KPMG ESG Assurance Maturity Index offers 
a framework for assessing your position in the 
ESG assurance maturity journey and charting a 
path forward.
As the research reveals, the challenges are diverse 
for those championing ESG assurance in their 
organizations — from costs and expertise gaps to 
regulatory ambiguity and supplier ESG performance.
Even so, the Leaders, typically larger companies, 
are more likely to have a business strategy that 
revolves around a sustainability perspective. They 
see ESG assurance as an opportunity, more than 
just a compliance requirement. The challenges are 
more acute of course for companies ranked as 
Beginners in becoming ESG assurance ready. The 
key for those companies is to get started now. 
Doing a materiality assessment to identify relevant 
sustainability metrics for your business and 
stakeholders is a great place to start. This anchors 
your ESG strategy, reporting focus, and assurance 
targets. Peer benchmarking offers insights, while an 
assurance map can help you prioritize metrics, 
identify gaps in the data and in determining what data 
needs to be fed into decisions the board is making.
To be ready for assurance, you will need to ensure 
that your ESG disclosures will meet preconditions for 
assurance. This means having suitable criteria for 
your disclosures. Having sufficient evidence in terms 
of data, that is of appropriate quality to allow your 
auditor or assurance provider to form an assurance 
conclusion. With meticulous preparation, clear 
communication strategies, and collaboration among 
stakeholders, you can establish a robust foundation 
for the assurance process, ensuring the accuracy and 
transparency of your ESG data and reporting for 
external validation.
The KPMG Ready for Assurance service can help 
you navigate the complexities of ESG assurance 
and to be ready for new regulatory requirements.
There is great value in 
assessing the preconditions 
prior to an assurance 
engagement taking place. 
This means ensuring you 
have identified the right 
framework, selected the right 
metrics and have robust 
processes for collecting and 
aggregating the data. Having 
the preconditions satisfied 
now, in advance of the 2024 
reporting cycle can be a huge 
step in meeting the coming 
requirements and help set 
businesses up for success.
Mike Shannon  
Global Head of ESG Assurance  
KPMG International
Road to readiness  |  21
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Glossary
Audit trail: A step-by-step record by which 
accounting, trade details, or other financial and 
non-financial data can be traced to their source.
ESG (Environment, social and governance): 
represents a set of criteria that companies use to 
evaluate and communicate their performance in key 
areas beyond traditional financial metrics.
Greenhouse gas (GHG) emissions: Scope 1: 
Covers emissions from sources that an organization 
owns or controls directly. 
Greenhouse gas (GHG) emissions: Scope 2: 
Covers emissions that a company causes indirectly 
and come from where the energy it purchases and 
uses is produced.
Greenhouse gas (GHG) emissions: Scope 3: All 
emissions not covered in scope 1 and 2, created by 
a company’s value chain.
Limited assurance: A level of assurance at an 
acceptable level that, based on professional 
judgement, is meaningful for the intended users. It 
results in a negative conclusion (i.e. ‘nothing has 
come to our attention to indicate that the 
information is materially misstated. 
Materiality assessment: An assessment to help 
identify a company’s most material issues and 
determine what should be reported. The process 
includes reaching out to internal and external 
stakeholders for input.
Non-financial reporting: the process of disclosing 
information about a company‘s ESG performance, 
impacts, and initiatives in addition to its financial 
data.
Reasonable assurance: Expressing reasonable 
assurance requires the assurance provider to obtain 
sufficient appropriate evidence to conclude that the 
sustainability-related information prepared, in all 
material respects, in accordance with the applicable 
reporting criteria (positive conclusion).
Sustainability: the practice of conducting business 
in a way that meets the needs of the present 
without compromising the ability of future 
generations to meet their own needs.
Road to readiness  |  22
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Contact us
KPMG International
Mike Shannon
mshannon@kpmg.com 
Neil Morris
neil.morris@kpmg.co.uk
Americas
John Depman
jdepman@kpmg.com
Asia Pacific
Nicola Buddee
nbuddee1@kpmg.com.au
Australia
Daniel Camilleri
dcamilleri@kpmg.com.au
Brazil
Sebastian Soares
ssoares@kpmg.com.br
Canada
Farah Bundeali
fbundeali@kpmg.ca
China
Patrick Chu
patrick.chu@kpmg.com
Europe, Middle East, Africa
Dirk Berkemeyer
dberkemeyer@kpmg.com 
France
Sarah Bagnon-Szkoda 
sbagnon@kpmg.fr 
Germany
Oliver Geier
ogeier@kpmg.com
Japan
Tomokazu Sekiguichi
tomokazu.sekiguchi@jp.kpmg.com
Netherlands
Ubbo van Zessen
vanzessen.ubbo@kpmg.nl
United Kingdom
George Richards
george.richards@kpmg.co.uk
United States
Maura Hodge
mhodge@kpmg.com
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