ESG Report

ESG Reporting Global Insights 2022 Current challenges, planned investments and technology opportunities

Introduction. With new environmental, social and governance (ESG) reporting mandates in force, businesses face an ongoing challenge of collaborating across departments to consolidate disparate financial and non-financial data. With the pressure mounting from governments, consumers and shareholders alike, meeting regulatory requirements is only the start. There are significant positives to geing ESG reporting right. Based on in-depth global research, this report explores how businesses are approaching the task of effectively updating their stakeholders. It investigates their key challenges, potential opportunities, and the positives of geing reporting right. To shape this report, we asked about current processes, collaboration and confidence from the people who really know the details: 1,300 decision makers who work in finance, ESG, sustainability, HR, compliance, operations, and legislative affairs. For all, their companies’ ESG reporting and strategy is their main or secondary job responsibility. We hope their insights help you discover how not just to provide a detailed ESG report but to do so in a way that adds untold value to your organization. WORKIVA  ESG REPORT FINDING 1

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Key data in brief. 68% of organizations globally have put in place specific roles to oversee ESG reporting and initiatives. 75% have started formally reporting on their ESG, climate and sustainability or corporate social responsibility data over the last three years. 63% of decision makers see formal stakeholder engagement informing ESG materiality to a significant extent. ESG reporting has generated a positive impact across customer retention and recruitment (72%), cost savings (71%), insurance or credit agency engagement (71%), and reduced long-term risk (71%). 63% of decision makers currently feel unprepared to meet their ESG goals and government and regulatory reporting mandates. Environmental issues are their biggest concern with their top two challenges being related to this area: calculating carbon accounting level data and greenhouse gas protocols for Scope 1, 2 and 3 emissions. Over the next 12-18 months, 43% of organizations’ internal ESG budget will be devoted to addressing environmental factors. 76% of decision makers believe technology is important to compiling and collaborating on ESG data. Only 35% believe they can use technology and data very well to make decisions on advancing ESG strategy. WORKIVA  ESG REPORT FINDING 2

Commied, effective, evolving. Organizations are treating the shi towards operating in a more socially conscious way seriously, taking genuine significant steps to change. There are clear positive outcomes for businesses who successfully report on ESG, but there are serious challenges to overcome before decision makers feel prepared for the road ahead. Our research finds that businesses are commied to effective ESG reporting. Most (75%) organizations formally report on their ESG, climate and sustainability or corporate social responsibility data, with only 14% yet to release a formal report. More than two thirds (68%) of organizations have put in place specific roles to oversee ESG reporting and initiatives. Only 7% have not nor plan to do so. Nearly 9 in 10 (88%) have an ESG stakeholder advisory board. Formal ESG stakeholder engagement is being treated as an ongoing and pivotal process, with almost half (49%) of organizations reporting every 3-6 months and 29% annually. It’s become so important that in many cases, materiality is being assessed at least twice a year to ensure all needs are addressed. Almost two thirds (63%) of decision makers say that formal stakeholder engagement informs ESG materiality to a significant extent. It’s early days but organizations are already experiencing benefits from this focus and investment. ESG reporting is mostly a recent phenomenon, with 38% of organizations kickstarting their formal announcements over the last 1-2 years. 20% have been doing it slightly longer, for 2-3 years. 5% 14% 6% For how long has More than 5 years your organization 3-5 years formally reported 20% 2-3 years ESG, climate/ 17% sustainability or CSR 1-2 years (Corporate social Only within the last year responsibility) data? We have yet to release a formal report 38% WORKIVA  ESG REPORT FINDING 35

Despite the short time frame, companies that have started disclosing their ESG performance are already experiencing business value from their proactive activities, with respondents reporting a positive impact across customer retention and recruitment (72%), generated cost savings (71%), increased insurance or credit agency engagement (72%), and reduced long-term risk (71%). Many also report improved employee morale (71%), recruitment (69%), and investor and stakeholder relationships (70%). Has ESG reporting already generated any of the below opportunities for your organization? Increased customer retention and recruitment 72% Beer insurance / credit agency engagement 72% Reduction of long-term risk 71% Generated positive media and brand awareness 71% Improved cost savings 71% Strengthening of partnerships 71% Improved employee morale 71% Improved investor and stakeholder relationships 70% Improved employee recruitment efforts 69% Failure to comply with new ESG requirements poses significant risks to the entire business. Decision makers believe that the financial impact of regulatory action would cause the greatest harm to their business (59%), but that is closely followed by concerns that investors would walk away (57%), sales would be lost (48%) and reputation dented (48%). Within the next 3 years, what do you believe would have the biggest impact if your organization fails to comply with ESG regulations? 59% 57% 48% 48% 45% 43% Financial impact Financial impact Loss of revenue Reputational Lack of consumer Challenges through negative through lack or sales damage confidence with recruitment regulatory action of investment WORKIVA  ESG REPORT FINDING 45

Despite the potential risks of ineffective reporting and the clear benefits of geing it right, the process has not yet been perfected. Challenges persist. In particular, reporting environmental data is concerning decision makers with their top two challenges relating to this area. Please rank the 3 biggest challenges for your organization regarding ESG reporting? Calculating greenhouse gas protocols 34% to measure scope 1, 2, 3 emissions Having carbon accounting level of data 33% Communicating corporate value to 32% address investor/stakeholder needs Lacking clarity around regulations 31% and framework standardization Lacking clear business goals for the 29% organization - corporate ESG strategy Conducting materiality assessment 29% and stakeholder engagement mapping Validating data for accuracy/auditing 28% Difficulty defining 27% and calculating metrics/KPIs Not having the right technology to manage ESG 21% reporting (compile and collaborate on data) Ensuring supply chain data accuracy 18% Funding ESG 17% As a result, there is still a long way to go not just in effectively reporting ESG but also in achieving ESG success more widely. Worryingly, as many as two thirds (63%) of decision makers feel unprepared to meet their ESG goals and government and regulatory reporting mandates at this moment in time. WORKIVA  ESG REPORT FINDING 5

Investment ahead: The ‘E’ takes priority. While progress is needed across all facets of ESG to ease decision makers’ concerns, tackling the environmental or ‘E’ element is the current major focus for organizations. As we have seen, decision makers feel unprepared and the areas where they have the biggest concerns are calculating greenhouse gas emissions and providing carbon accounting details. It makes sense that over the next 12-18 months, the area of ESG where most investment is being made is environmental: 43% of organizations’ internal ESG budget will be devoted to environmental factors, such as carbon, GHG, net zero, use of natural resources and travel. 29% is being allocated to social and 28% to governance. Thinking about 28% the next 12 - 18 43% Environmental - carbon, GHG, net zero, use of months what natural resources, organization travel policies proportion of Social - workplace safety, labor practices, DEI, employee engagement/volunteerism, relationships your ESG budget customers, suppliers and the community do you plan to Governance - rules and processes that decide how spend in the the organization operates, executive compensation, following areas? ethics and compliance, etc. 29% How quickly are organizations planning to make change happen? Where investment plans are in place, timeframes for improvements to ESG areas are typically short, falling within 1-3 years, with around a quarter seing out 5-year plans. However, even when they are planning to invest, more than half of organizations have not set out actionable steps and measurable goals to track performance. WORKIVA  ESG REPORT FINDING 6

Has your organization outlined actionable steps and measurable goals to track these improvement areas? Yes 49% 44% 45% Environmental - carbon, GHG, Social - workplace safety, labor Governance - rules and processes net zero, use of natural resources, practices, DEI, employee engagement/ that decide how the organization organization travel policies volunteerism, relationships customers, operates, executive compensation, suppliers and the community ethics and compliance, etc. What timeline, if any, has your organization set to achieve these improvements? 50 42%43% 40 38% 26% 30% 30 22% 26% 23% 25% 20 10 7% 6% 5% 2% 2% 2% 2% 1% 1% 0 Within 1 year Within 3 years Within 5 years Within 10 years More than 10 years No timeline set Environmental - carbon, GHG, Social - workplace safety, labor Governance - rules and processes net zero, use of natural resources, practices, DEI, employee engagement/ that decide how the organization organization travel policies volunteerism, relationships customers, operates, executive compensation, suppliers and the community ethics and compliance, etc. A third of organizations align with the SASB framework, with 3 in 10 (30%) aligning with CDP and TCFD (29%). There is relatively lile difference across all the frameworks in terms of where respondents are aligned, with the full percentages shown below. With which of the following frameworks does your organization align? 34% 30% 29% 27% 25% 25% SASB CDP TCFD GRI UN PRI UN SDGs WORKIVA  ESG REPORT FINDING 7

“Stakeholders are calling for more detailed and uniform data related to ESG. With the recent Sustainable Finance Disclosure Regulation (SFDR) directive in Europe, the ESG disclosure rule proposed by the SEC in the U.S. and the Singapore Exchanges recommended 27 core ESG metrics, the ESG reporting environment is becoming more complex for organizations. In particular, we are seeing companies grapple with how to accurately meet these required disclosures around the ‘E’ in ESG to report GHG emissions with carbon level accounting data.” Mandi McReynolds, Head of Global ESG at Workiva WORKIVA  ESG REPORT FINDING 8

Technology as a lever: Potential vs. reality. With so much complex data to collate from so many areas of the business, technology is a powerful lever in achieving the collaboration and transformation required. Yet our research shows many organizations are failing to invest time and resources in the right places. ESG reporting is being handled by a wide range of departments, driving close collaboration amongst teams. In over a third (38%) of organizations, this process is being driven by the sustainability/ESG and operations/facilities, followed by finance and human resources departments. Who are the decision makers at your organization who collaborate on the purchasing and utilization of ESG Reporting and Data Management technology? 38% 33% 27% 26% 26% 22% 20% 18% 14% ESG Leader / Chief Chief Chief Chief Board of Human Corporate CFO Procurement Sustainability Information Executive Governance / Directors Resources Communications / Officer/ Officer / IT Officer / Compliance / Marketing Chief Corporate President Legal Officer Responsibility Officer With so many different voices involved, three quarters (76%) of the decision makers who took part in our research believe that technology is important to compiling and collaborating on ESG data. They also see it as being important to validating data for accuracy (80%) and mapping disclosures to regulations and framework standards (85%). WORKIVA  ESG REPORT FINDING 9

How important or unimportant is technology to addressing each of the following issues? Mapping disclosures to regulations and 85% framework standards Supporting ratings investor, customer RFPs, and 84% stakeholder questionnaire responses Board and executive reporting 83% Having carbon accounting level of data 83% Conducting materiality assessment and 82% stakeholder engagement mapping Defining and calculating metrics/KPIs 82% Ensuring supply chain data accuracy 81% Calculating greenhouse gas protocols to 80% measure scope 1, 2, 3 emissions Validating data for accuracy/auditing 80% Compiling and collaborating on ESG data 76% ESG decision makers acknowledge a wide range of benefits to having the right technology in place: Why do you say that? 34% 33% 32% 31% 29% 28% 27% Makes us more Helps create Helps us be more Makes the Is very Helps us Removes efficient sustainable growth compliant/avoid process faster secure collaborate roadblocks in the regulatory reporting process interventions WORKIVA  ESG REPORT FINDING 10

Looking ahead at the next three years, of those planning on making internal ESG investments, technology is seen as being the area that will have the greatest impact. 23% 14% In the next 3 Utilization of technology years, where do Improved investor relations you think 15% internal ESG Growth/retention of customers investments will Talent recruitment & retention make the most 17% impact in your Growth of investor base organization? 15% Manage/decrease organizational risk 16% Unfortunately, despite knowing the pivotal role technology has to play in collaborating to report effectively, half (55%) of decision makers do not feel their organization’s departments have sufficient tools to provide the right ESG data. One in five (19%) think that their organization does not employ technology suitable for managing the ESG reporting process and program initiatives. 30% of those blame their legacy IT systems, saying they are incompatible with new required technology. Part of the problem is understanding: a quarter (27%) say they don’t fully know what technology is available or needed. Only a third (35%) believe they can use technology and data very well to make decisions on advancing ESG strategy at the moment, indicating there is significant scope to improve efficiencies and performance in this area. It is clear from our research that businesses understand the value of technology but aren’t yet using it to its full potential. Failure to invest will eventually lead to businesses falling behind and diminish their ability to demonstrate a high level of ESG performance to stakeholders. WORKIVA  ESG REPORT FINDING 11

Conclusion. To navigate this era of change in ESG, businesses must be forward-looking and flexible in their planning. Regulatory bodies, investors, customers, and other stakeholders have demonstrated what’s essential now, but this is only part of what will be essential for tomorrow’s reporting. Technology, which enables seamless integration between teams in one centralized platform, will be key to streamlining the reporting process long term and delivering transparent reports that can meet these evolving demands to further boost employee, investor and wider stakeholder trust. While challenges around communicating ESG corporate value to stakeholders still exist, the findings show clear positive outcomes for businesses who prioritize this reporting. Organizations must implement actions that allow them to keep pace with the current and future demands from regulators, investors and other stakeholders for trusted, transparent data and ESG forward-looking business goals. Julie Iskow, President & COO at Workiva WORKIVA  ESG REPORT FINDING 12

Key geographic data in brief. How does the picture differ in each geography we researched? Here’s the high-level view. 77% of US and Spanish organizations have appointed an ESG-specific role to oversee reporting and initiatives. Just 56% have followed suit in the Netherlands. Has your organization appointed anyone internally to an ESG-specific role to oversee reporting and initiatives? ‘Yes’ by country. 68% 77% 70% 68% 77% 71% 72% 73% 67% 65% 65% 59% 56% 58% Total US UK Germany France Spain Sweden Nether- Denmark Norway Italy Switzerland Austria Singapore lands A quarter (26%) of organizations in the UK have only formally reported ESG in the last year. For how long has your organization formally reported ESG, climate/sustainability or CSR (Corporate social responsibility) data? 42% 45% 46% 38% 38% 37% 36% 38% 41% 38% 35% 34% 31% 31% 26% 24% 24% 26% 21% 20% 22% 20% 20% 20% 22% 21% 21% 18% 20% 17% 15% 17% 17% 16% 14% 18% 15% 13% 14% 11% 12% 13% Total US UK Germany France Spain Sweden Nether- Denmark Norway Italy Switzer- Austria Singapore lands land Only within the last year 1-2 years 2-3 years WWORKIVORKIVA  ESG REPA  ESG REPORORT FINDINGT FINDING 13

Formal ESG stakeholder engagement and ESG materiality assessments happen a lot more frequently in the US (37% conduct surveys every 3 months vs. 18% globally). Approximately how oen do you conduct formal ESG stakeholder engagement and ESG materiality assessments? Once every 3 months. 37% 24% 21% 18% 19% 19% 19% 19% 12% 14% 10% 13% 13% 8% Total US UK Germany France Spain Sweden Nether Denmark Norway Italy Switzer- Austria Singapore lands land Has ESG reporting already generated any of the below opportunities for your organization? Top 3 by market Total US 72% 72% 71% 80% 79% 79% Increased customer Beer insurance / Reduction of Beer insurance / Reduction of Strengthening retention and credit agency long-term risk credit agency long-term risk of partnerships recruitment engagement engagement UK Germany 75% 74% 73% 79% 79% 78% Reduction of Improved Increased customer Increased customer Beer insurance / Strengthening long-term risk cost savings retention and retention and credit agency of partnerships recruitment recruitment engagement WWORKIVORKIVA  ESG REPA  ESG REPORORT FINDINGT FINDING 14

Has ESG reporting already generated any of the below opportunities for your organization? Top 3 by market France Spain 68% 67% 65% 79% 77% 77% Generated positive Improved Beer insurance / Reduction of Generated positive Improved cost media and employee credit agency long-term risk media and savings brand awareness recruitment efforts engagement brand awareness Sweden Netherlands 79% 71% 71% 67% 67% 66% Increased customer Generated Strengthening of Generated positive Improved cost Increased customer retention and positive media and partnerships media and savings retention and recruitment brand awareness brand awareness recruitment Denmark Norway 76% 74% 74% 76% 74% 73% Improved cost Generated positive Improved Improved investor Strengthening Increased customer savings media and employee and stakeholder of partnerships retention and brand awareness morale relationships recruitment Italy Switzerland 79% 79% 75% 75% 74% 74% Improved Improved investor Increased Improved Beer insurance / Reduction of employee and stakeholder customer retention employee credit agency long-term risk recruitment efforts relationships and recruitment recruitment efforts engagement Austria Singapore 72% 71% 69% 80% 80% 72% Strengthening of Beer insurance / Generated positive Increased customer Beer insurance / Improved partnerships credit agency media and retention and credit agency cost savings engagement brand awareness recruitment engagement WWORKIVORKIVA  ESG REPA  ESG REPORORT FINDINGT FINDING 15

My organization is underprepared with regard to ESG goals, planning and future mandates (Strongly Agree and Somewhat Agree) 63% 68% 63% 67% 65% 64% 61% 65% 66% 64% 63% 57% 55% 56% Total US UK Germany France Spain Sweden Nether- Denmark Norway Italy Switzer- Austria Singapore lands land My organization is underprepared with regard to ESG goals, planning and future mandates 36% 38% 35% 34%34% 33% 33%34% 28% 30% 29% 28%29% 26% 22% 21% 23% 23% 18% 18% 20% 20% 15% 14% 16% 15% 12% 16% Total US UK Germany France Spain Sweden 42% 34% 37% 35% 34% 33% 33%33% 32% 29% 27% 27% 29% 26% 23% 25% 22% 22% 21% 21% 16% 18%17% 16% 13% 12% 11% 12% Netherlands Denmark Norway Italy Switzerland Austria Singapore Strongly agree Somewhat agree Somewhat disagree Strongly disagree WWORKIVORKIVA  ESG REPA  ESG REPORORT FINDINGT FINDING 16

The US is well ahead of the curve with 71% having formalized the process for environmental spend, 58% for social and 65% for governance. At the other end of the spectrum, in the Netherlands just 33% of businesses have a formalized process for both environmental and social and 41% have these steps in place for governance. Has your organization outlined actionable steps and measurable goals to track these improvement areas? Yes. 71% 65% 58% 56% 51% 53% 49% 44% 45% 49% 45% 44% 45% 46% 47% 47% 50% 41% 40% 40% 38% Total US UK Germany France Spain Sweden 54% 58% 51% 50% 51% 48% 47% 47% 46% 42% 44% 41% 41% 38% 37% 38% 38% 38% 40% 33% 33% Netherlands Denmark Norway Italy Switzerland Austria Singapore Environmental - carbon, GHG, Social - workplace safety, labor Governance - rules and processes net zero, use of natural resources, practices, DEI, employee engagement/ that decide how the organization organization travel policies volunteerism, relationships customers, operates, executive compensation, suppliers and the community ethics and compliance, etc. At least two thirds (rising to more than 4 in 5) in each market believe that technology is important when ‘compiling and collaborating on ESG data’. How important or unimportant is technology to addressing each of the following issues? Compiling and collaborating on ESG data (Very important and Somewhat important) 76% 85% 78% 77% 78% 76% 81% 79% 84% 74% 73% 68% 74% 67% Total US UK Germany France Spain Sweden Nether- Denmark Norway Italy Switzer- Austria Singapore lands land WWORKIVORKIVA  ESG REPA  ESG REPORORT FINDINGT FINDING 17

Compiling and collaborating on ESG data: How important or unimportant is technology to addressing each of the following issues? 49% 45% 42% 43% 41% 41% 36% 36% 36% 33% 33% 34% 34% 26% 25% 15% 14% 15% 23% 14% 9% 8% 8% 11% 11% 9% 7% 7% Total US UK Germany France Spain Sweden 45% 44% 46% 42% 42% 40%39% 36% 39% 38% 32% 33% 31% 32% 20% 20% 17% 13% 15% 16% 12% 10% 7% 10% 6% 4% 5% 6% Netherlands Denmark Norway Italy Switzerland Austria Singapore Very Important Somewhat Important Not Very Important Not at all important How well do you feel your organization uses technology and data to make decisions on advancing your ESG Strategy? Answer: Very well. 65% 35% 37% 37% 39% 43% 39% 35% 31% 24% 31% 26% 25% 20% Total US UK Germany France Spain Sweden Nether- Denmark Norway Italy Switzer- Austria Singapore lands land WWORKIVORKIVA  ESG REPA  ESG REPORORT FINDINGT FINDING 18

About our research. To gather insight to these questions, Workiva commissioned Coleman Parkes, an independent research agency, specializing in B2B technology, to conduct primary research amongst relevant businesses. In total, 1,300 respondents were surveyed via an online methodology, with fieldwork conducted between 14th April – 6th May 2022. All research participants had at least some stake in their organization’s ESG reporting and strategy as part of their job responsibilities, with 66% saying ESG formed a majority of their responsibilities and 34% saying it formed a portion of their responsibilities. Participants were drawn from businesses of 250+ employees and all businesses fell Energy (including Oil & Gas) within one of the following industries: Financial services Manufacturing Retail & Wholesale Within which sector does your organization primarily operate? Food & Beverage Energy (including 10% Technology 9% Oil & Gas) Financial services 10% Construction 8% Manufacturing 10% Telecoms 8% Retail & Wholesale 10% Professional Services 8% Food & Beverage 10% Real Estate 8% Technology Transportation 8% Construction Telecoms Professional Services Real Estate Transportation 0 2 4 6 8 10 WORKIVA  ESG REPORT FINDING 19

Research was conducted in 13 global markets (with an even split of 100 surveys in each market) Sweden US Norway Netherlands Denmark UK Austria Germany Spain Italy France Switzerland Singapore All participants worked within one of the following business areas within their organization: Finance Sustainability Human Investor Government/ & ESG Resources Relations Legislative Affairs Legal/ Operations/ Communications/ Procurement Compliance Facilities Marketing 13% 29% Senior Manager / Manager 15% Senior Director / Director Levels of seniority Individual Contributor C Suite / executive level management Vice President 17% 27% WORKIVA  ESG REPORT FINDING 20

About Workiva. Workiva Inc. (NYSE:WK) is on a mission to power transparent reporting for a beer world. We build and deliver the world’s leading regulatory, financial, and ESG reporting solutions to meet stakeholder demands for action, transparency, and disclosure of financial and non-financial data. Our cloud-based platform simplifies the most complex reporting and disclosure challenges by streamlining processes, connecting data and teams, and ensuring consistency. Learn more at workiva.com. WWORKIVORKIVA  ESG REPA  ESG REPORORT FINDINGT FINDING 21

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