“Disclosure overload” has become increasingly overwhelming to both the corporate reporter and readers of sustainability reports, according to Governance & Accountability Institute’s latest research.
Many of the enterprises now publishing sustainability reports have their resources spread thin trying to respond to many indicators — no matter how irrelevant or immaterial it may be to their business. The investors, and other readers of the reports may find it hard to cut through the overwhelming amount of information to find the key pieces of data and narrative that really matter.
So when it comes to sustainability, what does matter?
G&A’s research attempts to answer the question for company managements in 35 different sectors, by examining the disclosure practices of 1,246 global sustainability reporters using the Global Reporting Initiative (GRI) framework in year 2012.
In 2011 and 2012 the Institute published its annual research report titled, Sustainability — Does it Matter? These efforts analyzed the S&P 500 companies for their sustainability reporting (or non-reporting) and type of reporting, tracking positive third party recognitions the companies enjoyed in the form of financial stock outperformance, inclusion in reputational lists; favorable rankings, ratings, and scores; and selection for investable index inclusions.
This earlier research found sustainability does matter and showed dramatic growth of sustainability reporting in the S&P 500 with 52 percent in 2011, and 20 percent in 2012’s report.
Earlier this month The G&A Institute team updated this research with a flash report to show that for the 2013 reporting year 72 percent of the S&P 500 now report on Sustainability.
As the number of organizations publishing sustainability or corporate responsibility reports is dramatically increasing, so too, is the focus on determining the materiality of content of reports.
This new research investigates 1,246 reports, divided into 35 sectors from agriculture to waste management, to find out what matters the most and least across 84 GRI performance indicators.
“Determining what sustainability issues are material — what really matters — to an organization with its own unique attributes is key to making a real impact with the report, and making the business case for sustainability,” says G&A’s Louis Coppola. “When organizations try to do everything at once, they wind up accomplishing very little, and waste precious resources. Through this research we hope to empower company management to better identify what their peers see as the specific sustainability issues that they can focus their resources on to create significant return in the form of new opportunities for the company, its stakeholders and investors.”
The report containing the top 10 and bottom 10 indicators and additional information for each of the 35 sectors analyzed is free; the full rankings for all 84 indicators for each of the 35 sectors are available for purchase.
