Half of firms allocate more than 25% of sustainability budget to mandatory disclosures

Companies flag compliance costs in report by Business at OECD, with 83% predicting further rises. 

Most companies spend less than a quarter of their sustainability budgets complying with reporting requirements, according to new research. 

Just under half (47%) of the 92 firms surveyed by trade body Business at OECD said they were allocating more than 25% of resources to mandatory ESG disclosures “rather than to actual project implementation”. 

The companies in the sample were predominantly European, and half were publicly listed. 

For 17%, mandatory reporting accounted for half their sustainability budget.  

Nearly 60% were spending more than $1m on the preparation of ESG disclosures, with 13% stating that costs had exceeded $5m.  

The report said most firms (83%) expected spending to rise. 

Along with costs, the complexity of compliance was cited as a top concern, as well as the unpreparedness of supply chains.