American Electric Power, Clorox, Dow Chemical, Eaton, Ingersoll Rand, Pfizer and Southwest Airlines are the only companies in the S&P 500 — just 1.4 percent of the total — with fully integrated annual financial and sustainability reports, according to a study from the IRRC Institute and the Sustainable Investments Institute (Si2).
All seven companies, which are spread across different industry groups, used the Global Reporting Initiative guidelines as a reference or otherwise complied with one of GRI’s most recent reporting frameworks, according to the report.
The report, Integrated Financial and Sustainability Reporting in the United States, found every company in the S&P 500, except one, reports some form of sustainability disclosure. Zions Corporation was the only company not to include any sustainability disclosure across the various reports examined.
Still, many companies integrated some sustainability and financial reports (see graphic for companies with the highest reporting scores).
Nearly three quarters, or 74 percent, of the companies in the S&P 500 placed a dollar figure on at least one sustainability-related initiative. However, these companies frequently mentioned other initiatives whose benefits or costs were not quantified, the report says.
Some 43.4 percent of the companies linked executive compensation to some type of sustainability criteria.
Disclosure of capital expenditures on environmental controls were the most common, with 68 percent of companies sharing environmental management information. Many companies wrote about reducing overall operational risks, such as environmental spills and related cleanup and remediation costs and employee health and safety.
Climate change, specifically in the context of potential regulation in the US and as a major concern among stakeholders, was mentioned by 66 percent of companies in the S&P 500.
An Ernst & Young guide for executives published last year recommends companies aiming to combine financial and non-financial material into a single, integrated report should begin by framing their business goals and environmental and social objectives with capital opportunities and risks. The report, Integrated Reporting: Driving Value, discusses the benefits and challenges of integrated reporting and outlines four initial steps companies should take to implement the reporting practice.