Sustainability Reporting Today
In response to growing pressure from a variety of stakeholders, thousands of US companies are now publishing sustainability reports and reporting environmental and social performance against voluntary frameworks. A recent study found that 72 percent of the S&P 500 Index published sustainability reports in 2014, up from just 20 percent in 2011[1]. Despite a lack of regulation, many companies are choosing to disclose against voluntary standards like GRI and CDP. While reporting practices have drastically increased in the US over the last decade, the US market is still lagging behind Europe and data quality and consistency continues to be a concern.
Main Drivers of Sustainability Reporting in the US
1. To meet or prepare for regulation and policies set forth by government, stock exchanges or industry groups. With the passage of the Dodd Frank Act, publicly traded companies are now required to disclose on a range of issues from pay disparity to mineral sourcing[2]. In lieu of stringent federal regulations, states are passing their own sustainability polices. In January 2013, California implemented the first Cap and Trade program for green-house-gas emissions in the US[3]. Major cities, including NYC and Chicago, have also passed regulation requiring increased disclosure, for example, energy benchmarking laws mandating buildings over a certain size to disclose build energy use[4].
2. To appease internal and external stakeholders, including: consumers, investors, employees, civil society, suppliers etc. Today, more than ever, shareholders are turning towards mechanisms like shareholder resolutions to pressure companies to publish sustainability reports. In 2013, nearly 70 percent of the S&P 500 disclosed carbon emissions data to CDP, a shareholder led initiative[5]. Retailers are also using their influence to get suppliers to disclose sustainability information. In 2009, the Walmart Sustainability Index incentivized thousands of companies to begin tracking and investing in sustainability and carbon emission reporting[6].
3. To improve internal processes and enhance brand value. In the sustainability world, the phrase, “you can’t manage what you don’t measure” has almost become cliché in its use. Though companies continue to see the truth in this statement and through measuring and reporting sustainability data have been able to identify risks and opportunities for their business. Buildings using Energy Star Portfolio Manager to track and report energy data have found on average a 7 percent energy savings[7] through the process of becoming aware of how the building is performing. Measuring sustainability metrics allows companies to set goals, measure progress, manage change.
[1] Governance and Accountability Institute, Inc. (2014) http://www.truevaluemetrics.org/DBpdfs/Metrics/GAI/GAI-Sustainability-What-Matters-2014.pdf
[2] Greentech (2013) http://www.greentechmedia.com/articles/read/chicago-passes-energy-benchmarking-disclosure
[3] MSCI (2010) https://www.msci.com/insights/sri/sriesg_investing/sif_trends_report.html
[4] California Air Resources Board (2014), http://www.arb.ca.gov/cc/capandtrade/capandtrade.htm
[5] PWC (2014) https://www.pwc.com/us/en/corporate-sustainability-climate-change/assets/pwc-cdp-s-and-p-500-climate-change-report.pdf
[6] Groom Energy (2014) http://enablon.com/wp-content/uploads/2014/06/Guide-to-Energy-Carbon-and-Sustainability-Software-Groom-Energy.pdf
[7] Energy Star (2012) http://www.energystar.gov/about
2. To appease internal and external stakeholders, including: consumers, investors, employees, civil society, suppliers etc. Today, more than ever, shareholders are turning towards mechanisms like shareholder resolutions to pressure companies to publish sustainability reports. In 2013, nearly 70 percent of the S&P 500 disclosed carbon emissions data to CDP, a shareholder led initiative[5]. Retailers are also using their influence to get suppliers to disclose sustainability information. In 2009, the Walmart Sustainability Index incentivized thousands of companies to begin tracking and investing in sustainability and carbon emission reporting[6].
3. To improve internal processes and enhance brand value. In the sustainability world, the phrase, “you can’t manage what you don’t measure” has almost become cliché in its use. Though companies continue to see the truth in this statement and through measuring and reporting sustainability data have been able to identify risks and opportunities for their business. Buildings using Energy Star Portfolio Manager to track and report energy data have found on average a 7 percent energy savings[7] through the process of becoming aware of how the building is performing. Measuring sustainability metrics allows companies to set goals, measure progress, manage change.
[1] Governance and Accountability Institute, Inc. (2014) http://www.truevaluemetrics.org/DBpdfs/Metrics/GAI/GAI-Sustainability-What-Matters-2014.pdf
[2] Greentech (2013) http://www.greentechmedia.com/articles/read/chicago-passes-energy-benchmarking-disclosure
[3] MSCI (2010) https://www.msci.com/insights/sri/sriesg_investing/sif_trends_report.html
[4] California Air Resources Board (2014), http://www.arb.ca.gov/cc/capandtrade/capandtrade.htm
[5] PWC (2014) https://www.pwc.com/us/en/corporate-sustainability-climate-change/assets/pwc-cdp-s-and-p-500-climate-change-report.pdf
[6] Groom Energy (2014) http://enablon.com/wp-content/uploads/2014/06/Guide-to-Energy-Carbon-and-Sustainability-Software-Groom-Energy.pdf
[7] Energy Star (2012) http://www.energystar.gov/about
