Corporate sustainability disclosure and reporting is now the norm for large-cap companies in the US, according to a Governance & Accountability Institute report.
In its fifth annual analysis of S&P 500 Index reporting, G&A Institute found that 81 percent of the companies included in this investment benchmark published a corporate responsibility or sustainability report in 2015. This is up from just 20 percent of companies reporting in 2011.
Reporting companies have increased over the five years that G&A Institute has conducted its analysis. In 2012, 53 percent S&P 500 companies reported; the following year 72 percent reported and by 2014, 75 percent were publishing reports.
G&A Institute says the growing number of corporate reporters underscores the importance of setting strategies, measuring and managing ESG issues in response to growing stakeholder and shareholder expectations — and in many cases, demands for such reporting, including information requests from major customers.
The growing demand for sustainability disclosure was a key theme at the Environmental Leader’s conference in Denver last week, with several major companies and analyst firms saying shareholder demands for metrics such as carbon reductions are on the rise.
“Operational excellence is synonymous with sustainability,” said Scott Lockhart, head of operational excellence and risk management at IHS, in speech before attendees. “There is pressure to disclose their non-financial metrics alongside their financial metrics.”
In another session, Sandy Nessing, managing director of sustainability at American Electric Power, also made it clear that stakeholders want companies to disclose what they are doing to shrink their environmental footprint and benefit their communities.
“We’re seeing a lot more interest in disclosure from investors, whether shareholder activists or real institutional investors, ” she said. “The challenge: when you report, which do you report to and how deep do you go?”
The key, she said it to connect financial performance with nonfinancial performance.