A new study has found significant deficiencies in disclosed corporate sustainability policies and practices.
That finding is despite the fact that many corporations have instituted policies and are making progress on sustainability, says the study from the Sustainable Enterprise Institute (SEI), a recently formed not-for-profit organization based in Vienna, Va., dedicated to promoting sustainable business practices.
"We have heard repeated concerns from investors and other company stakeholders that the depth, consistency and overall quality of corporate environmental disclosure does not provide a sufficient factual basis for an understanding of a firm's environmental posture or performance. For their part, some corporate representatives have expressed frustration with the apparent lack of uptake and use of published environmental data and sustainability reports within the investor community," said Peter Soyka, SEI president and a cofounder. Soyka, president of Soyka & Co. LLC, an environmental and sustainability management consulting firm, coauthored the report with Mark Bateman, director of research for IW Financial, which collects data on corporate sustainability.
Key findings in the study include:
Only about 60% of the largest U.S. publicly traded companies have any readily available documentation that could be considered an environmental policy; environmental, health and safety (EHS) policy; or sustainability policy. Most policies lack rigor and sophistication: Fewer than 28% have any of six key policy elements, and fewer than 9% have any of three or more of these elements.
Only about 8% of these firms apparently vest oversight responsibility for environmental, social and governance (ESG) issues and/or for its environmental policy in its board of directors, and only 1 in 18 has unambiguously delegated this responsibility to a senior corporate officer.
Of the 590 firms in the Russell 1000 with tangible environmental (or EHS or sustainability) policies, about two-thirds make clear that the policy requirements apply to all employees and operations, and just over half apply uniform standards worldwide; only about one-fourth of all policies include specifics as opposed to general principles and/or aspirations. About 30% claim to have a formal environmental management system and about two-thirds of these are patterned after the ISO 14001 standard.
Only about 13% of Russell 1000 companies have published a corporate environmental, corporate social responsibility or sustainability report. Fewer still have reported key management activities, such as extent of employee training or significant performance end points like regulatory violations or fines and penalties.
While 27% of Russell 1000 firms have disclosed their direct greenhouse gas emissions, only about 16% have a corporate climate change policy, and only 60% of these firms make clear that it applies to all company operations and employees. Fewer than 25% of the relatively few climate change/GHG emissions policies have any of several key elements of a sound policy.
Only 11% of firms in the Russell 1000 have disclosed their annual energy costs, and about 7% have disclosed their total water use and/or cost.