Companies increasingly recognize the importance to their bottom line of a comprehensive sustainability strategy, which includes reporting.
What do an auditing firm, an ice cream company and a chemical manufacturer have in common? They are each brand leaders. They are each multinationals. And, they top the charts in Sustainability Rankings. In addition, KPMG, Ben & Jerry’s and SC Johnson put out Sustainability Reports.
The Centre for Sustainability and Excellence (CSE) research finds a persistent link between sustainability reporting and financial performance. Ernst & Young, Coca-Cola and Microsoft are examples of companies that lead CSR rankings and had increased revenues from 2016 to 2017 — they also put out Sustainability Reports.
CSE research describes the current state of sustainability reporting by companies and organizations based in the U.S. and Canada. Looking at the top 10 companies in terms of revenue for 2017, sector by sector, 100 percent of the Health Care Products sector published a sustainability report — way to go, Johnson & Johnson!
Financial and sustainability performance informs framework
CSE analyzed 642 unique North American sustainability reports for the 2017 reporting period. CSE’s framework identifies correlations between ESG performance and financial results. The 50 companies with the highest ESG scores (CSRHub ranking as of July 2018) indicate a strong correlation between financial performance and sustainability performance. Between 2016 and 2017, 80 percent of these companies had an increase in their revenues, an indication that sustainability strategies and sustainability reporting, representing a culture of transparency may have a positive impact on revenue.
Financial Services, Energy lead reporting
Sectors with the highest reporting presence include: Financial Services, Energy and Energy Utilities, Food & Beverage, Healthcare Products and Mining. Surprised to see the often-maligned mining sector on the list? Canadian companies such Barrick Gold, Potash Corp and Goldcorp Inc. are taking a stand. For example, Goldcorp’s community engagement is both personal and regenerative, taking responsibility for the wrongs of predecessors as it expands operations.
For a 3rd year, GRI leads as the reporting standard of choice; and the adoption of the UN Sustainable Development Goals doubled, with respect to the previous research (13.9 percent from 6.2 percent).
Companies increasingly recognize the importance to their bottom line of a comprehensive sustainability strategy. Strategy and reporting combined include goals and externally assured performance data. Use of external assurance among the top 10 in each sector is higher than the sample average. Thanks for leading the way, PepsiCo, Intel and Pfizer!