You can’t manage what you don’t measure, right?
Cardinal rule of running an efficient, profitable business.
That means the rise of sustainability reporting among U.S. companies is good news for a cleaner, healthier world.
A sustainability report is like the company’s Annual Report, only it covers economic, environmental, social and governance performance instead of financial performance.
Most major U.S. brands issue sustainability reports, like Kraft for example.
(Increasingly, these two reports are combined to give investors a full picture of the company’s activities, like Pepsico does. That’s called integrated reporting.)
The publication of corporate sustainability (or responsibility) reports by U.S. corporations (and U.S.-based subsidiaries of non-U.S. companies) is on the increase. Our analysis for reports published in 2011 — include reports published in calendar year 2011 — is at 345 – and we’re half way through 2012 and expect many more reports to be added to our count for 2011.
It’s about time too, since the U.S. lags in reporting behind the rest of the world.
Ninety-five percent of the 250 largest companies in the world (G250 companies) now report on their corporate responsibility (CR) activities, two-thirds of non-reporters are based in the U.S.
What’s driving sustainability reporting by U.S. companies?
I attended an EnvironmentalLeader.com webinar yesterday and this very question came up. Marjella Alma from GRI (Global Reporting Institute) gave the following explanations.
Sustainability reporting among U.S. companies is on the rise because of:
- Increasing stakeholder demand for this data
- Preparing for potential regulatory developments that will mandate reporting
- Growing positive interest from investor community
- Recognition that reporting Sustainability activities is a competitive advantage with sustainability-minded customers
- Opportunity to better identify risks and opportunities
- Reduced operating costs.
In other words, sustainability reporting is less about managing risk and more about taking a strategic position.
It’s coming down to the simple fact that running a business that’s good for the planet and people, is also good for business.