US companies rally toward sustainability reporting
Companies in the US are more likely than ever to provide their investors with a sustainability or corporate responsibility report, finds recent research that suggests the practice may soon become the norm.
According to analysis by the Governance & Accountability (G&A) Institute, 72 percent of the companies that make up the S&P 500 index published some form of annual CSR report for shareholders in 2013.
The report describes the S&P index as ‘one of the most widely followed barometers of the US economy and conditions for large-cap public companies in the capital markets’, and therefore a good indication of reporting practices across the country.
The figures mark a significant improvement on 2012, when 53 percent of companies in the index were reporting, and 2011, when less than than 20 percent were.
Louis Coppola, who led G&A Institute’s research, believes the findings give ‘clear indications that senior management understands the importance of adopting and implementing’ sustainability strategies.
It is, however, still unclear how important investors consider sustainability issues to be. Though a PwC study in May 2014 found that four in five institutions had considered a CSR issue before investing in the past year, a Callan Associates report in November 2013 found that only 20 percent of US institutions adhere to ESG principles in their investment strategies.
G&A Institute’s research forms an integral part of a wider report produced by the Global Reporting Initiative, titled ‘Carrots and sticks: Sustainability reporting policies worldwide’. Written with the help of the United Nations Environment Program, KPMG and the Centre for Corporate Governance in Africa, the resulting document examines the trends surrounding mandatory and voluntary reporting practices around the world.
The group’s 2013 research finds that in 45 countries and regions, 187 initiatives were in place to promote sustainability reporting, of which 134 were mandatory and 53 voluntary.