Is Risk Really 5X More Important Than Opportunity?

No. Nobody actually believes that. But read enough sustainability statements and you'd struggle to tell. Every large company in Europe now publishes one of these. A double materiality assessment, setting out the Risks and the Opportunities it considers material to its business.

ESRS is specific about how the two are meant to be treated once they're on the page. Appendix B, qualitative characteristic 7: both sides "shall receive equal attention." Qualitative characteristic 8, on prudence: the standard defines prudence as caution under uncertainty, then says in the same breath that this caution "does not allow for the understatement of opportunities or the overstatement of risks." So the usual excuse, that Opportunities are too uncertain to report properly, is ruled out by the same paragraph that requires care. Equal attention. Do not understate. That's the instruction.

A little further into the standard, something else appears. When a company reports an Opportunity, it has to consider, among other things, "whether the opportunity is currently being pursued and is incorporated in its general strategy, as opposed to a general opportunity for the undertaking or the sector." The Commission's 2026 revision keeps this and hardens it into an outright restriction, while loosening the wording from "pursued and incorporated" to "pursued or incorporated.

"There is no equivalent anywhere for Risk. Not in the standard these companies reported under, not in the revised one. A Risk that's been identified and not yet acted on is reportable as it stands. An Opportunity in exactly the same state gets filtered out before it ever reaches the page. Equal attention, on paper. An extra hurdle, in practice, for one side of the ledger only.

So I counted.

I'm a Chartered Director trained by the Institute of Directors in board level risk, and a GRI-certified ESRS Professional. Put those two together and a rule that quietly filters Opportunity but not Risk isn't a technicality. It's a red flag. So I coded 70 European sustainability statements to see what actually comes out the other end. Forty large companies reporting under mandatory ESRS. Thirty mid-size companies reporting voluntarily under VSME, where none of this is compulsory. Every discrete item in every statement, tagged Risk or Opportunity, under one protocol applied identically on both sides.

Why five times?

One number is doing the work in that headline, and I want to be straight about where it comes from before going any further. Among the forty mandatory reporters, wholesale and retail disclosed Risks over Opportunities at close to five to one. 4.7 to 1, on a properly sampled group of five companies, the widest gap of any sector I could sample robustly. That's not a freak result. Nine of the eleven sectors I measured lean the same direction. Retail is just where it shows up hardest, and it holds at scale too, not only in one corner of the sample.

The number for everyone.

Across all forty mandatory reporters pooled, it's 455 Risks disclosed against 196 Opportunities. 2.32 to 1. More than twice as often. Go down to item level and it sharpens. In 52 of 140 company-by-topic assessments, a business listed the Risks of a topic and not one single Opportunity on the same subject. More than one in three. To be fair to the companies in the sample: seven of the forty came out the other way, disclosing more Opportunities than Risks, and 36 of the 40 disclosed at least one Opportunity somewhere. This isn't a wall of zeroes. It's a pattern that's very hard to miss.

And when nobody has to report at all?

The forty mandatory reporters are all working under the same rule, so I looked at thirty companies the rule doesn't reach. Reporting voluntarily under VSME, with nothing compelling any of it, they disclosed 88 Risks against 30 Opportunities. 2.93 to 1, nearly three to one among the voluntary reporters, and close to three-quarters of them disclosed no Opportunity at all. Take the requirement away and the gap doesn't close. It widens, and it changes shape. Under a mandate this is a gap of depth: nine in ten companies still disclose something on the Opportunity side. Without one, it becomes a gap of absence.

Not mine alone.

This isn't Nemetan's finding sitting on its own. EFRAG's own 2026 State of Play report, covering 905 assured Wave 1 ESRS statements, the largest dataset of its kind, found companies disclosing an average of 3.1 Risks against 2.0 Opportunities within Climate Change. A ratio of 1.55 to 1. My own Climate-Change-only figure, computed independently from my 70-company sample, comes out at 1.69 to 1. Same direction, on a dataset roughly thirteen times the size of mine.

KPMG went further back, reviewing 270 first-wave sustainability statements and splitting every disclosed item three ways rather than two. Impacts came out at 60% of all items, Risks at 26%, Opportunities at 14%, and 11% of the companies reviewed identified no Opportunity at all. Three separate studies, three separate methods, the same lean every time.

What this doesn't show

I counted what companies disclosed. That's not the same as what they found. A business can identify an Opportunity, judge it material, be quietly building it into strategy, and never put a word of it in the statement. The gap could open at the search itself, at what survived assessment, at what got carried into strategy, at what's actually being pursued, or at what was finally judged reportable. I can only see the last of those. I'm not claiming anyone failed to look, because the data in front of me can't tell me that either way.

It's worth saying plainly: I'm not a neutral party here. Nemetan sells services at the discovery end of this problem, so a claim that the shortfall is about looking rather than reporting would suit me commercially. That's exactly why I'm not making it.

So what?

For compliance teams, the practical read is mechanical. If your Opportunity count looks thin against your Risk count, the question worth asking isn't whether anyone tried. It's whether a live, material Opportunity is sitting unreported simply because it hasn't cleared the pursued-or-built-into-strategy bar yet, while a Risk in the identical state would already be on the page.

For strategy teams, the public version of a company's sustainability story tends to draw on the Risk side, because that's the half with more detail and more scrutiny behind it. An Opportunity that never made it past the filter isn't just invisible to a competitor. It's often invisible to the next strategy conversation too.

For the board, it comes down to one question I can't answer for you. I can only see what got disclosed, not what's known inside the building. So there are two possibilities. Either the disclosed picture is the real one, and the board is setting strategy against a full account of downside and a partial one of upside. Or the internal picture is fuller, and the statement the board signed off understates its own Opportunities, which is precisely what qualitative characteristic 8 says prudence does not allow. Two different problems. A board should be able to say which one it has, and most, on the evidence here, currently can't.

Where to start?

If this has you wanting to check your own numbers, I'd point you at the short course before the free tools. Seeing the Opportunity runs three hours, self-paced, €300, and it's the first of three that build toward the full Ideation certificate. It teaches you to run this kind of check on your own materiality assessment, rather than handing you a score and leaving you to work out what it means.(https://www.nemetan.com/academy/short-courses)

The full study is coded across 70 European sustainability statements, forty mandatory ESRS reporters and thirty voluntary VSME reporters, item by item, under a single protocol. The company roster, the item-level register and the coding decision log are available on request.