More U.S. Corporations Must Scale Up Sustainability Efforts, Report Says
BOSTON, MA, April 30, 2014 /3BL Media/ – A report released today by Ceres and Sustainalytics found that while there are encouraging pockets of sustainability leadership in the U.S. business community, far too many companies are only taking small, incremental steps to address pressing sustainability issues that could impact their bottom lines and the future of our planet and economy – such as climate change and human rights.
“Given the acceleration of environmental and social challenges globally – floods, droughts, and workplace tragedies – most U.S. corporations are not keeping pace with the level of change,” said Mindy Lubber, president of the sustainability advocacy group, Ceres. “Those that step up to the challenge will be best positioned to thrive in the rapidly changing, resource-constrained 21st century economy.”
The report, which assesses the sustainability performance of 613 of the largest publicly traded companies in the U.S., covers nearly 80 percent of the total market capitalization of all public companies in the country. It tracks corporate performance against 20 key metrics essential for any sustainable corporation to follow, including governance, disclosure, greenhouse gas emissions reductions and labor standards. It identifies sustainability trends across eight key sectors, highlighting industry best practices and which companies are leading among their peers. It also provides aggregate data and online scorecards for companies on each performance area. Key findings include:
- While many companies are taking action to reduce GHG emissions, few have set time-bound targets. More than two-thirds of the companies evaluated (438) have activities in place aimed at reducing GHG emissions, but only 35 percent (212) have established time-bound targets for reducing GHG emissions. In terms of renewable energy, 37 percent of companies have implemented a program, while only six percent have quantitative targets to increase renewable energy sourcing.
- A growing number of companies are incorporating sustainability performance into executive compensation packages. Twenty-four percent of companies (147) link executive compensation to sustainability performance – up from 15 percent in 2012.
- More companies are setting clear sustainability standards for suppliers. Fifty-eight percent of companies (353) have supplier codes of conduct that address human rights in supply chains, compared to 43 percent in 2012. However, only a third (205 companies) have some activities in place to engage suppliers on sustainability performance issues, up from 27 percent in 2012.
The metrics used in this report were first spelled out in the Ceres Roadmap for Sustainability, which has been used by dozens of leading companies since 2010 to incorporate sustainability into their business planning and corporate accountability infrastructure.
“The findings of this report should inspire companies to examine their own progress and identify where they stand on the path to sustainability,” said Michael Jantzi, CEO and Founder of Sustainalytics. “This is about more than how companies stack up against their peers – it’s about how innovation is driving performance from the corporate boardroom throughout the entire supply chain.”
In addition to informing the sustainability efforts of companies, the report provides important information to shareholders about how the companies in their portfolios are performing in key areas, such as disclosing material issues and engaging with stakeholders.
“This report is critical for investors because it reveals how well prepared or, in many cases, how poorly prepared individual companies are to thrive in an economy being profoundly shaped by sustainability risks and opportunities,” said Anne Stausboll, Chief Executive Officer of the California Public Employees’ Retirement System (CalPERS) – the largest public pension fund in the country.
The report, Gaining Ground: Corporate Progress on the Ceres Roadmap for Sustainability, was released today at the 25th anniversary Ceres Conference, where leaders in social and environmental sustainability – from former President of Ireland, Mary Robinson, to Nike’s Vice President, Innovation Accelerator & CSO, Hannah Jones – will discuss the importance of leadership across the public and private sectors to protect the world for future generations.
Download the full report and view company scorecards at www.ceres.org/scorecards.
Ceres is an advocate for sustainability leadership. Ceres mobilizes a powerful coalition of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy. Ceres directs the Investor Network on Climate Risk (INCR), a network of over 100 institutional investors with collective assets totaling more than $12 trillion. Ceres also directs Business for Innovative Climate and Energy Policy (BICEP), an advocacy coalition of nearly 30 businesses committed to working with policy makers to pass meaningful energy and climate legislation. For more information, visit www.ceres.org or follow on Twitter @CeresNews.
Sustainalytics is an independent ESG research and analysis firm supporting investors around the world with the development and implementation of responsible investment strategies. The firm partners with institutional investors who integrate environmental, social and governance information and assessments into their investment decisions. Headquartered in Amsterdam, Sustainalytics has offices in Boston, Bucharest, Frankfurt, London, Paris, Singapore, Timisoara and Toronto, and representatives in Bogotá, Brussels, Copenhagen, New York City and San Francisco. The firm has 150 staff members, including more than 80 analysts with varied multidisciplinary expertise and thorough understanding of more than 40 industries. In 2012 and 2013, Sustainalytics was voted best independent sustainable and responsible investment research firm in the Thomson Reuters Extel’s IRRI survey. www.sustainalytics.com