Reporting 2025 – Perspectives: Hot Topics and the Role of Companies

The GRI global organization is conducting a series of interviews with thought leaders to gain their perspectives on what they expect the main issues to be on corporate agendas and their public reports in 2025.  These are produced monthly and G&A Institute will share these through our websites, newsletters, blog, social media, and various other channels to raise awareness of this important initiative.

Hot Topics and the Role of Companies 
This video presents the highlights on the hot topics and the role of companies from the interviews conducted as part of the Sustainability and Reporting 2025 project.

22 March 2016

FLASH REPORT: G&A Institute and Trust Across America Partner to Examine Trustworthiness for S&P 500® Companies Not Reporting on Sustainability

Results Show Higher Trust for Firms Reporting on Their Sustainability Journeys

New York, NY – March 24, 2016 — Continuing the in-depth analysis of S&P 500 (r) companies’ sustainability reporting activities, Governance & Accountability Institute teamed with the Trust Across America / Trust Around the World program to explore potential relationships of the trustworthiness of companies that do and do not report utilizing the TAA/TAW’s proprietary  FACTS® scoring. FACTS® analyzes approximately 2000 US based public companies on five quantitative indicators of corporate trustworthiness. TAA/TAW has found that companies with higher FACTS® scores are more profitable and over time their stocks outperform major indexes.

Trust Across America analyzed the current year’s data for the S&P 500 companies that G&A identified as reporting on Sustainability, versus the shrinking minority of identified non-reporter, and found the following.  Of the 99 companies that do not publish sustainability reports, TAA had data on 72 of them, and of the 401 reporting companies, TAA has data on 398 of these companies.  Looking at this universe of a total of 470 companies with full data from both parties, G&A and TAA determined that:

  • S&P 500 reporting companies have a 15 percent higher FACTS® Score than non-reporters.
  • Reporting Companies have a 15% higher average FACTS® score 55.84 vs. 44.36.
  • For non-reporting companies, the lowest FACTS® score is 31, shared by Urban Outfitters and Synchrony Financial. 
  • The highest tFACTS® score of the entire group is 78 for Southwest Airlines – a reporter.
  • 75% of reporters scored 50 or over on FACTS®, versus only 51% of non-reporters
  • 49% of non-reporters scored under 50, versus only 20% of reporters

This chart illustrates the percentage of S&P 500 non-reporters versus companies that report on Sustainability in the various TAA scoring bands:

Trust Across America developed its “FACTS® Framework” seven years ago; the audit model’s approach is to combine financials and non-financials in measuring trustworthy business behavior to tell an integrated, unbiased and unified story to stakeholders.  The “FACTS” Framework elements are:  “F” for financial stability and strength; “A” for accounting conservativeness; “C” for corporate integrity; “T” for transparency; and “S” for sustainability. All indicators are equally weighted. The framework is applied to more than 2,000 companies to determine the “High Trust” enterprises on a scale of 1 to 100 with 100 being the highest.  Companies do not participate in the independent annual analysis.

Commenting on the TAA/TAW findings, CEO/Co-founder Barbara Brooks Kimmel said: “Understanding that no company is perfect, it comes as no surprise that companies choosing to voluntarily report their sustainability practices score substantially higher in our FACTS® Framework. The “best” companies have incorporated organizational trust as an intentional business strategy and seek to meet the long-term needs of all their stakeholders, not just shareholders.”

For information: http://www.trustacrossamerica.com

Background:  G&A’s Flash Report (March 15, 2016)
In the fifth annual monitoring and analysis of S&P 500 Index® company reporting just completed by the Governance & Accountability Institute research team, the findings are that eighty one percent (81%) of the companies included in this important investment benchmark published a sustainability or corporate responsibility report in 2015.

The S&P Index is one of the most widely-followed barometers of the U.S. economy, and conditions for large-cap public companies in the capital markets.

To put this in context G&A in tracking prior year(s) reporting found that:

  • in 2011, just under 20% of S&P 500 companies had reported;
  • in 2012, 53% (for the first time a majority) of S&P 500 companies were reporting;
  • by 2013, 72% were reporting — that is 7-out-of-10 of all companies in the popular benchmark;
  • in 2014, 75% of the S&P 500 were publishing reports.

As we entered year 2016, just 19% of the S&P 500 were not publishing sustainability reports. The practice of reporting by the 500 companies is now holding steady with minor increases year-after-year. The chart below represents the trends of S&P 500 sustainability reporting over the last five years:

About Governance & Accountability Institute, Inc.
Founded in 2006, G&A Institute is a sustainability consulting firm headquartered in New York City, advising corporations in executing winning strategies that maximize return on investment at every step of their sustainability journey.  The G&A team helps corporate and investment community clients recognize, understand and address sustainability issues to address stakeholder and shareholder concernsG&A Institute is the exclusive Data Partner for the Global Reporting Initiative (GRI) in the USA, UK and Ireland.  A G&A team of six or more perform this pro bono work on behalf of GRI. Over the past 5 years, G&A has analyzed more than 5,000 sustainability reports in this role and databased more than 100 important data points for each of the five thousand reports.

G&A’s sustainability-focused services and resources include: counseling & strategies for the corporate sustainability journey; sustainability reporting assistance; thorough materiality assessments; stakeholder engagement;benchmarking; enhancing investor relations; sustainability communications; manager coaching, team building & training;  advice on third party awards, recognitions and index inclusions; issues monitoring & customized research.

*S&P 500®
According to S&P Dow Jones Indices / McGraw Hill Financial: “The S&P 500® is widely regarded as the best single gauge of large cap U.S. equities.  There is over US$7 trillion benchmarked to the index, with index assets comprising approximately US$ 1.9 trillion of this total. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.”  The S&P 500 is a trademarked® property of S&P Dow Jones Indices, McGraw Hill Financial.

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G&A CONTACT
Louis D. Coppola
Co-Founder, EVP & Chief Architect of Research Projects
Governance & Accountability Institute, Inc.
Tel 646.430.8230 ext 14
Email lcoppola@ga-institute.com

THIS YEAR’S TALLY OF S&P 500® COMPANY DISCLOSURES – 81% NOW PUBLISHING SUSTAINABILITY / RESPONSIBILITY REPORTS

For institutional investors, the key benchmark for many professionals is the S&P 500®, which is considered to be the best single gauge of large-cap U. S. equities. More than US$7 trillion in Assets Under Management are benchmarked to this index, including indexed AUM of $1.9 trillion. In all, the S&P 500 captures 80% coverage of available market cap.

The G&A Institute research team tracks the sustainability / responsibility / citizenship reporting activities of these 500 leading companies.  When we started our annual tallying of reporters/non-reporters in 2011, we found that 80% of the S&P were not publishing sustainability reports.  The 2015 tally show that 81% were reporting – a dramatic reversal over the five year period.

Put another way, the non-reporters went from being 80% of the total to just 19% now – a dramatic trend that reflects, we believe, the steadily increasing expectation of asset owners and managers, and other stakeholders (such as major customers) that large-cap publicly-traded companies will develop sustainability strategies, organize teams, measure key ESG data sets, manage carbon emissions, water intake and waste, and much more…and then report on their progress in a structured manner.  (Many of the S&P 500 embrace the Global Reporting Initiative framework).

Louis Coppola, G&A’s executive vice president, designs and coordinates the annual S&P 500 analysis project.  His thoughts on reviewing the 2015 reporting, and the dramatic shift over the five years of researching: “Corporate leaders have become more sophisticated in the disclosures and reporting activities, with an increased focus on using concepts such as materiality, stakeholder engagement, comparability, context, timelines, and reliability to make ESG data more strategically useful for decision-making by both management and stakeholders, including investors.”

The 2016 review of corporate reporting activities in 2015 included the work of a very talented intern team – their contributions were important and we salute them here:

  •  Julia Casciotti – Columbia University – M.P.H in Environmental Health Sciences, May 2016
  • Alexander Cohen – Baruch College – MBA Sustainability and International Business, December 2015
  • Kristina Jette Mullen – Simmons School of Management – MBA in Sustainability & Business Strategy, May 2015
  • Ashley Thomsen – W.P. Carey School of Business – B.A. Global Logistics Management, May 2016
  • Alvis Yuen – City College of New York  M.S. in Sustainability, December 2016

We invite you to read and download for your files the details of our S&P 500 research effort:

FLASH REPORT: Eighty One Percent (81%) of the S&P 500 Index Companies Published Corporate Sustainability Reports in 2015
(Tuesday – March 15, 2016)
Source: Governance & Accountability Institute, Inc. - G&A Institute charted the rapid and significant uptake in corporate sustainability reporting among the 500 companies — over the years sustainability reporting rose from just 20% of the companies reporting in 2011 to 81% in 2015….

CSR CERTIFICATE PROGRAM – FACULTY / COURSE UPDATE: What is “Materiality”? Why Is It important? How Do I Assess What ESG Issues are Strategically Important?

 An Interactive Course to Answer These Questions Led by Louis D. Coppola

Rutgers Business School’s Institute for Ethical Leadership and G&A Institute joined forces to develop and offer a Corporate Social Responsibility Certificate Program for corporate professionals. The first executive education program classes begin on Wednesday, April 27 and Thursday, April 28 at the Rutgers Business School campus in Newark, New Jersey. The two-day program features a deep dive into CSR and the related fields of philanthropy, sustainability, risk management, supply chain management, and ethics.

Louis. D. Coppola of Governance & Accountability Institute will lead an interactive course focused on diving deep into the history, definitions, and practicality of “materiality” from a sustainability perspective and the importance of determining materiality in the context of the corporate CSR program or when making investment decisions.

Materiality, as the U.S. Supreme Court defined it under the scope of U.S. securities law (and as the Securities & Exchange Commission generally applies it to corporate disclosure and reporting) along these lines: The materiality of particular information is whether there is a substantial likelihood that a reasonable investor would consider the misstated or missing information as having significantly altered the total mix of information that was available.

With the dramatic expansion of disclosure and reporting of ESG performance data (environmental, social and governance), the range of information being made public by companies is bringing about a vigorous dialogue (especially among investors) focused on the materiality of information.

Focusing on the critical ESG issues that will enable the company to better manage risk, take advantage of opportunities, better engage with important stakeholders, and position itself to be a winner in the 21st Century business environment is what a well thought out ESG Materiality process is all about.

Various important players have helped to shape the discussion around this important topic including the Global Reporting Initiative with its G4 framework, and the intensified focus on materiality. GRI considers materiality to be a stakeholder inclusive process beyond the investor stakeholder including customers, employees, supply chain, communities, academics, and NGOs. A more recent player in this field is the Sustainability Accounting Standards Board (SASB) which uses the US regulatory definitions of Materiality.

Participants in the Corporate Social Responsibility classes will have an opportunity to learn the various players and approaches to materiality. They will be guided through group exercises with their peers to examine materiality and they will learn through real world practical examples from leaders in the field.

Participants will be able to directly relate to the content and material, allowing them to apply their learning to their current work place immediately.

Registration includes breakfast, lunch, dinner Wednesday evening, parking, and course materials. Upon completion of the 2 day program, participants will be awarded a certificate in executive leadership. The program runs from 9:00 am to 5:00 pm, on Wednesday, April 27 and Thursday, April 28, at the Rutgers University Business School in Newark, NJ.

To learn more about the CSR Certificate program, call 973-353-1134, email leadership@business.rutgers.edu, or visit http://www.business.rutgers.edu/iel/csr.

ABOUT GOVERNANCE & ACCOUNTABILITY INSTITUTE
Governance & Accountability Institute is a sustainability consulting firm headquartered in New York City, assisting corporations in executing winning strategies that maximize return on investment at every step of their sustainability journey. The G&A team helps corporate and investment community clients recognize, understand and address sustainability issues to address stakeholder and shareholder concerns. G&A Institute is the exclusive Data Partner for the Global Reporting Initiative (GRI) in the USA, UK and Ireland. A G&A team of six or more perform this pro bono work on behalf of GRI. In 2015, they analyzed more than 1,200 sustainability reports in this role and databased more than 100 important data points related to each report.

G&A’s sustainability-focused services and resources include: counseling & strategies for the corporate sustainability journey; sustainability reporting assistance; thorough materiality assessments; stakeholder engagement; benchmarking; enhancing investor relations; sustainability communications; manager coaching, team building and training; issues monitoring & customized research; advice on third party awards and recognitions. Visit G&A at www.ga-institute.com

ABOUT THE INSTITUTE FOR ETHICAL LEADERSHIP
The Institute for Ethical Leadership at Rutgers Business School works with business and government, nonprofit and philanthropic organizations, and within Rutgers University to provide leaders and future leaders with the education, training and critical-thinking tools needed to become more effective leaders and managers and make ethical decisions for real-world challenges. For more information, visit www.business.rutgers.edu/iel.

Reporting 2025 – Perspectives: The Future of Reporting and Preparing the Next Generation

The GRI global organization is conducting a series of interviews with thought leaders to gain their perspectives on what they expect the main issues to be on corporate agendas and their public reports in 2025.  These are produced monthly and G&A Institute will share these through our websites, newsletters, blog, social media, and various other channels to raise awareness of this important initiative.

The Future of Reporting and Preparing the Next Generation
This video presents the highlights on the future of reporting and preparing the future business leaders from the interviews conducted as part of the Sustainability and Reporting 2025 project.

Advancing CSR Leadership: G&A Institute Teams With Rutgers’ Institute for Ethical Leadership In New 2 Day Certificate Program – First Classes Begin in April / Certificates to be Awarded at Completion

The esteemed business teacher and author Peter Drucker had specific views on ethical leadership:  He thought the ethics of personal responsibility stemmed from the advice of the ancient healer, Hippocrates:  Primum Non Nocere – First Do No Harm. Today’s healthcare professionals live by the rule.  And explains commentator William Cohen, PhD for us: Drucker thought the mirror test was a good test:  look in the mirror and ask, what kind of person do I want to see this morning?

Best-selling author Malcolm Gladwell (“Blink,” and “The Tipping Point”) writes that leaders have to look deeply involving the question of values.  They need to ask fundamental questions about the defining values that provide for them resources and the boundaries for their private and public deportment.  Values determine!

Each year, the Ethisphere organization names the “100 Most Influential in Business Ethics,” recognizing the 100 individuals that have made a material impact in the world of business ethics and compliance.  Anne Simpson, Investment Director at CalPERS pension system is on the list.  So is Jose Ugaz, Chair of Transparency International.  And Elan Musk, Chairman & CEO of Tesla Motors is among the 100 leaders.

In the new norms of the era we have entered – Sustainability Excelsior! – stakeholder expectations regarding ethical behavior on the part of leaders in the corporate sector as well as in many other sectors of our society have been increasing in frequency and breadth of issues.  (The issues in focus are more and more in the ESG categories.)

Governance & Accountability Institute is partnering with Rutgers University Business School’s Institute for Ethical Leadership (Newark, New Jersey) to develop and offer a 2-day Corporate Social Responsibility Certificate Program.  The goal:  providing a competitive advantage to CSR teams and corporate professionals in the rapidly-expanding field (and designated corporate function).

The program launches with the first two-day classes on April 27th and April 28th at the Rutgers Business School in downtown Newark (NJ).  (The location is convenient to New York City.) The curriculum offering is a “deep dive” into CSR, sustainability, risk management, supply chain management, and of course, ethics in leadership.  The invitation is being extended to corporate managers, sustainable investors, as well as to leaders in philanthropy (one topic of note is the changes in corporate approaches to philanthropy).

The Institute for Ethical Leadership’s co-founder, James Abruzzo (managing partner, DHR International), notes:  the best ethical leaders believe that corporate responsibility goes beyond the shareholders to embrace the common good. When social responsibility is part of the company culture, both the company and society benefit.

Governance & Accountability Institute & Rutgers Business School Announce a Partnership to Educate Corporate Professionals on Corporate Social Responsibility & Sustainability
(Tuesday – March 01, 2016) 
Source: G&A Institute
 -  Rutgers Business School’s Institute for Ethical Leadership (IEL) and Governance & Accountability Institute  announced today a partnership to develop and offer a Corporate Social Responsibility (CSR) Certificate Program with the purpose of providing a competitive advantage to CSR teams and corporate professionals expanding into this growing field.

For more information and to sign up for the course, telephone 973.353.1134 or visit: www.business.rutgers.edu/iel/csr.