The leading consulting firm on corporate sustainability and ESG, Governance & Accountability Institute, Inc. (G&A) has announced the results of its 2021 Sustainability Reporting in Focus analysis with regard sustainability reporting trends among companies in the S&P 500® Index and the Russell 1000® Index. The report comes on the 10th anniversary of G&A’s research series where they closely track the largest U.S. public companies’ publication of sustainability reports.

With close attention paid to the 2020 publication year, G&A’s 2021 Sustainability Reporting in Focus report discovered that these companies have made it top priority and something of best practice when it comes to sustainability reporting.

Key findings include:

  • 92% of the S&P 500 companies published a sustainability report in 2020, a 2% increase
  • 70%, or a 5% increase of the Russell 1000 companies published a sustainability report in 2020
  • 49% of the smallest half by market cap of the Russell 1000 companies published a sustainability report in 2020, up from 39% in 2019
  • More than two thirds of sustainability reports published by Russell 1000 companies discussed the impact of the COVID-19 pandemic

In 2012, G&A’s analysts commenced researching the sustainability reporting of the S&P 500® companies for the publication year 2011. This became the baseline for annual reviews of corporate sustainability reporting trends in subsequent years. The results of this initial research ten years ago showed that just 1 in 5 of the S&P 500 companies published sustainability reports or disclosures. Alternatively, we can deduce that 80% of the S&P 500 companies were NOT publishing such reports at that time. G&A has been monitoring sustainability reporting trends of the S&P 500 companies each calendar year since then – and today the percentage of non-reporters is only 8%.

Included is a breakdown of the non-reporters in the S&P 500 and Russell 1000 by sector as well as the detailed reporting behaviors of the companies utilizing common frameworks and standards (GRI, SASB, TCFD), companies aligning with the UN Sustainable Development Goals (SDGs), and trends in external assurance and survey reporting (CDP, CSA/DJSI).

G&A’s detailed research findings on Russell 1000 companies for the 2020 publication year include the following examples:

  • Just over half of the reporting companies used the Global Reporting Initiative (GRI) Standards
  • 39% of the reporting companies aligned with the Sustainability Accounting Standards Board (SASB) Standards
  • Aligned with the Task Force on Climate-related Financial Disclosures (TCFD) Recommendations accounted for 17% of the reporting
  • Slightly more than 40% of reporting companies presented alignment with specific UN SDGs
  • Around a third of reporting companies used external assurance for their sustainability disclosures
  • 40% of the Russell 1000 responded to the CDP Climate Change questionnaire

Louis Coppola, G&A’s Executive Vice President and Co-Founder, who has designed and managed all the annual analyses to date, commented,

“The last few years have been incredibly challenging with the compounding crises of COVID-19, social inequity, climate change, and for many a loss of trust and faith in our institutions. During these trying times, the focus on ESG and sustainability issues and topics has continued to deepen and accelerate. In some ways, I believe this acceleration is a direct reaction by society to the problems we all face and the environment we now find ourselves in, and I believe it will help us navigate our way through these crisis situations and the ones to come.

It is exciting to see the smaller companies in this year’s research embracing this trend as well. It is also interesting to see increased use of relatively newer, yet critical reporting frameworks like SASB and TCFD — especially as regulators here in the U.S. and around the world move towards further consolidation and rulemaking of disclosure standards for ESG.”

Hank Boerner, G&A’s Chairman, Chief Strategist and Co-Founder, added,

“The corporate sustainability community has been challenged over the past decade by the rapid expansion of reporting frameworks and standards that have emerged and evolved. The G&A team wrestles with an alphabet soup of frameworks and standards that corporations and their providers of capital are expected to use for sustainability reporting and ESG metrics.

G&A’s research has clearly shown that corporate sustainability reporting is now a best practice for the leading U.S. public companies and is increasingly being adopted by mid-cap companies as they recognize the value of being recognized for their commitment to ESG. As the world confronts the impact of climate change and other global challenges, we believe the corporate sustainability community will continue to play an important role by holding corporations and the capital markets accountable and providing ways to measure the impact of sustainability and ESG programs.”

Click here to read the full report for more comprehensive reporting breakouts and details on the S&P 500 and Russell 1000 companies.

Source: G&A