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ESG

Ceres: U.S. corporations making progress on addressing sustainability

More U.S. corporations than ever are addressing sustainability, but there is still progress to be made, according to a new report from non-profit sustainability organization Ceres.

The report, "Turning Point: Corporate Progress on the Ceres Roadmap for Sustainability," analyzes the data of 600 corporations and compares the progress they have made against Ceres' Roadmap for Sustainability released in 2010. The road map established 20 goals for corporations in the areas of governance for sustainability (which includes board oversight and management accountability), stakeholder engagement, disclosure and operations.

In the operations category, for example, Ceres had established a goal that corporations should reduce greenhouse gas emissions by at least 25% by 2020. Of the 600 corporations analyzed for the new report, 64% have committed to reduce greenhouse gas emissions. However, of that population, only 36% have set "time-bound" quantitative targets, and only 25% of those companies are working toward reducing emissions by 2020.

In the category for governance for sustainability, the report said 98% of companies that had set targets for the reduction of greenhouse gas emissions have a senior executive responsible for sustainability performance, displaying a sense of management accountability. The original road map said the CEO and company management should be "explicitly accountable for achieving sustainability goals."

Of all companies whose data was analyzed, 65% have a senior management official holding such a position, a significant increase over the 42% of companies who had such a position in 2014, the last time Ceres collected similar data.

Also according to the corporate progress report, those companies that follow Ceres' road map expectation of corporate boards providing formal oversight of their sustainability strategies are "three times more likely to have time-bound and company-wide (greenhouse gas) commitments than those that do not," the report said. Of all the companies cited in the report, only 31% integrate sustainability into their board charters and 3% engage their boards on sustainability without any formal oversight. In 2017, 8% of companies linked executive compensation to sustainability issues beyond mere compliance, up from 3% in 2014.

In the category of stakeholder engagement, the corporate progress report said that 32% of companies in 2017 said they conduct materiality assessments to identify environmental, social and governance policies, up from 7% in 2014. Also, 43% of companies engage investors on sustainability.

In the disclosure category, Ceres said in the corporate progress report that 229 companies, or 38%, use Global Reporting Initiative standards in public reporting, up from 32% in 2014. The report also said 51% of companies disclose climate-change risks in their 10-K filings with the SEC, up from 42% in 2014. One of the original road map expectations was that "companies will disclose material sustainability risks and opportunities, as well as performance data, in financial filings."

The original 2010 report on Ceres' Roadmap for Sustainability is also available on its website.