In 1999, fewer than 500 companies issued sustainability reports. That number is now over 3,500. Once only a concern for a few niche companies with sustainability as a core value and brand differentiator, corporate sustainability has moved categorically into the mainstream.
Today, there is a growing demand for companies to demonstrate a responsible, sustainable, long-term approach to business, to produce a statement of their sustainability activities, and to clearly show how this relates to their core business strategy. Corporate sustainability reports now contain detailed performance metrics and reflect the priority companies have given to measuring and managing the impact of their operations.
Several factors have driven the current momentum for sustainable corporate performance:
Stakeholder expectations: Companies understand the many benefits of sustainable operations, especially now that they engage with a wider range of stakeholders – shareholders, employees, business partners, investors, consumers, NGOs, the media – who demand accountability and transparency.
Global standards: The development and acceptance of global standards has played a critical role in sustainability reporting and performance management. Currently, over 1,500 companies across 60 countries have adopted the G3 standards – introduced by the Global Reporting Initiative, which provides a universal framework for disclosure. Additionally, groups such as the World Business Council for Sustainable Development, the World Resources Institute and the World Intellectual Capital Initiative have also developed useful resources for business reporting language.
Investor interest: Institutional investors and stock exchanges have also asked for better sustainability reporting from listed companies. Consequently, environmental, social and corporate governance indices have been established, such as the Dow Jones Sustainability Index and The Carbon Disclosure Project.
Natural resource constraints: Every company that depends on natural resources is facing increased costs and constraints. Sustainability helps companies improve their operations as natural resource constraints reshape markets.
In November, I had the honor of serving on the Selection Committee of the Zayed Future Energy Prize – a global initiative by the Abu Dhabi government that recognizes and rewards outstanding efforts in the renewable energy and sustainability sectors. I was impressed by the number of companies that had developed approaches, practices and processes to measure their performance as sustainable businesses.
From my experience on the Selection Committee, one thing is clear: corporate sustainability is becoming a boardroom strategy that is driving enormous creativity, efficiency and innovation.
The day may come when understanding the lifecycle of a product or service is so engrained in business that we won’t need to call that “sustainability”. Until then, initiatives such as the Zayed Future Energy Prize help showcase and promote the business value of sustainability, while facilitating sharing and learning between large corporations, NGOs and individuals.
Article by Roberta B. Bowman, Senior Vice President and Chief Sustainability Officer at Duke Energy, and served as a member of the Selection Committee for the 2012 Zayed Future Energy Prize. Article appearing courtesy Earth & Industry.