Closing the gap between perception and reality in sustainability reporting

Faith Taylor: Sustainability issues are real, and we can no longer afford to view them in isolation. The evidence is all around us. In 2024 alone, the U.S. endured 27 weather and climate disasters, each causing over $1 billion in damage, totaling $182.7 billion in losses, according to NOAA’s National Centers for Environmental Information. Globally, the World Meteorological Organization recorded 605 extreme weather events that same year, displacing over 824,000 people — the highest number of new displacements in 16 years. These are not distant threats. They are present-day humanitarian and business risks.

From the enterprise perspective, that means companies — and governments — must incorporate sustainability metrics and strategies into their core planning. Kyndryl’s Global Sustainability Barometer Study indicates that 85% of organizations already rank environmental sustainability as a top strategic priority. Climate risk is a core business risk tied directly to growth, resilience and value creation — not simply an ESG add-on.

Is all of this “just talk”? We’re at a turning point, and we must move faster. Of the organizations that track sustainability metrics for reporting, only 40% say they use that data to guide decisions. Yet nearly 60% of companies that do integrate sustainability data into their decision-making derive real financial benefits — from improved efficiency to new market opportunities. Disclosure demands are driving genuine change, but organizations must accelerate their efforts to turn data‑driven insights into meaningful action.

Taylor: Insurance companies are the clearest signal we have of how serious climate risk has become, but every industry and government is exposed. Insurers face enormous pressure today, and in some markets, operating sustainably has become increasingly difficult. That has serious consequences not just for a regulated industry, but for the millions of homeowners, businesses and public-sector organizations that depend on coverage.

The challenges have become acute. In the US, major carriers in California and Florida have already paused or restricted issuance of new homeowners’ policies due to climate-driven losses. As of 2025, Florida policyholders are paying up to four times the national average for coverage by the major carriers, while Citizens Property Insurance — the state’s insurer of last resort — has tripled its policy count to 1.2 million over the last four years. Globally, insurers paid out more than $137 billion in weather-related losses in 2024 — signaling a structural shift in the way insurers must adapt their risk models to the new reality.

Regulators’ expectations and rigorous standards are driving operational changes in how insurers measure and disclose climate risk. Insurers are investing in advanced climate modeling and real-time alert systems to shape updated approaches to underwriting. They’re also moving investments into cleaner, low‑carbon industries to avoid financial losses that might occur as governments, markets, and technologies shift toward a greener, low‑carbon economy. It’s clear that sustainability reporting is driving these changes.