EY Survey: Over Half of CFOs Fear Greenwashing Risks Amid Sustainability Data Challenges
Overview:
A recent EY survey reveals that over half of CFOs are concerned about greenwashing risks due to persistent sustainability data problems, highlighting the need for improved data quality and transparency.
Source: EY
CFOs’ Greenwashing Concerns
The survey, which polled over 2,000 finance leaders globally, found that 55% of CFOs fear their industry's sustainability reporting could be perceived as greenwashing. This concern stems from issues like varying data formats, inconsistencies, and incomplete data.
Investor Confidence
Interestingly, 53% of investors also doubt that companies will achieve their sustainability targets. This lack of confidence is driven by poor-quality disclosures and the perception that companies may not be fully committed to their sustainability goals.
Data Challenges
The survey highlights several key data challenges faced by CFOs, including:
Varying Data Formats: 39% of respondents cited this as a major issue.
Data Inconsistencies: 35% reported inconsistencies in the data they receive.
Incomplete Data: 34% mentioned incomplete data as a problem.
Unclear Definitions: 33% found data definitions to be unclear.
The Path Forward
To address these challenges, EY suggests a fundamental reset of nonfinancial reporting practices. This includes ensuring that sustainability efforts are transparent, verifiable, and aligned with financial decision-making.
The EY survey underscores the urgent need for better sustainability data quality and transparency to mitigate greenwashing risks and build investor confidence. By addressing these data challenges, companies can enhance their credibility and commitment to sustainability goals.
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