More companies are publishing reports on their sustainability efforts every year as corporate social responsibility becomes increasingly important to key company investors and stakeholders as well as customers. A new report from the Governance & Accountability Institute found 81% of S&P 500 index companies issued corporate sustainability reports in 2015, more than ever before.
That is up from 2014 when 75% of S&P 500 companies published sustainability reports, detailing environmental, social and governance (ESG) efforts and achievements. In 2013, 72% of these large-cap companies did and in 2012, for the first time a majority (53%) issued reports. The 2015 reporting number is also a significant improvement from 2011, when the G&A Institute said less than 20% of S&P 500 companies had reported on their sustainability projects.
With 19% of S&P 500 companies still not reporting on corporate sustainability efforts, Hank Boerner, chairman of the institute, wondered what the non-reporting enterprises were thinking, calling them “laggards” among their peers.
“Are these companies not recognizing the significant range of benefits that accrue to their more sustainable peers?” Boerner asked. “Do they understand the rising expectations of stakeholders seeking more information about their company's environmental, social and governance performance? At the least, the companies seem to be resistant to the demands of shareholders for more information about their ESG policies and performance.”
Reports Become More ‘Strategically Useful’ For Businesses
Not only are more companies issuing sustainability reports, but the reports are becoming more detailed and useful for decision makers, the G&A Institute said.
“Corporate reporters have also become more sophisticated in the disclosure and reporting activities, with an increased focus on using reporting concepts such as materiality, stakeholder engagement, comparability, balance, context, timeliness and reliability to make ESG data more strategically useful for decision making by both management and stakeholders including investors,” Louis D. Coppola, executive VP of G&A Institute, said in a press release.
Companies Set Sustainability, Stakeholder Engagement Goals in 2015 Reports
Caterpillar is one company listed on the S&P 500 Index that recently issued its 2015 sustainability report. Called “What We’ve Built. What We’re Solving,” the report details the company’s progress on sustainability efforts in the last year and highlights goals it has for the future. For instance, according to the report, Caterpillar has reduced its absolute energy consumption 10% in 2015 compared with 2014. Also, in 2015, the company said 27.1% of its electrical energy came from renewable and alternative sources.