S&P 500® Index Companies’ ESG/Sustainability, Responsibility Reporting Hits 86% For Year 2018 – Latest G&A Institute Research Results…

by Hank Boerner – Chair and Chief Strategist, G&A Institute

The G&A Institute’s S&P 500 Index(r) analysis for the constituent companies’ 2018 reporting is complete.

For the eighth year, the G&A Institute research team has examined the ESG, Sustainability, Responsibility & Citizenship disclosure and reporting practices of the S&P 500® Index companies — and determined for year 2018 that 86 percent of the almost 500 public companies were publishing reports in various formats for public viewing.

This is a 1% increase over the 85% reporting trend determined by G&A researchers for year 2017. When the research effort began eight years ago (for 2010 reporting, in the 2011 examination) the number of companies among the 500 was just below 20%.

In the beginning of January each year, the current team of G&A analysts begin their examination of the prior year’s reporting trends. 

The S&P 500 companies (not always an exact number) are closely examined to determine public disclosure and reporting practices for activities that may be branded “corporate sustainability, or responsibility or citizenship, or even environmental” that appear in print, web or hybrid versions.

The initial results are double checked by other analysts and by EVP Louis Coppola, the architect of G&A’s research efforts since 2011.  G&A Institute Senior ESG Analyst Elizabeth Peterson assists as team leader in the coordination of the analysts’ research (she has been involved in the effort for several years now).

G&A’s team report analysts who contributed to the research this year are: Minalee Busi, Jessica Caron, Emilie Ho, Jess Peete.

The S&P 500 Index research results are widely cited by investors, analysts, company managers and other stakeholders in their own work and have become a standard reference for those citing the dramatic increase in corporate sustainability reporting. 

Institutional investors cite the results in urging non-reporting companies to begin reporting to shareholders on their sustainability journey.

You can see the full report in the news release that is linked as the Top Story this week.

FLASH REPORT: 86% of S&P 500 Index® Companies Publish Sustainability / Responsibility Reports in 2018
(Thursday – May 16, 2019) Source: Governance & Accountability Institute, Inc. – Highlights from Governance & Accountability Institute, Inc. Research: “Sustainability reporting” rose dramatically from 2011, when roughly 20% of companies published reports, to 72% just three years later in 2013. From 2013 to…

2nd in Series: The Agriculture Products Industry — GRI & SASB Standards In Focus – Perspectives on Alignments & Differences

By Emilie Ho – G&A Institute Sustainability Report Analyst Intern

During my analysis, I found that although many of the material disclosures that the SASB Standards suggest for disclosure by the Agriculture Products Industry are in line with the GRI’s Topic Disclosures, there are also a number of material topics that SASB advances for disclosure that do not have a related disclosure under the GRI Standards.

Interestingly, some of the material disclosures that do share overlap also have differences in what the two reporting frameworks suggest companies include in their sustainability reports. (Note that in the United States, use of both standards is voluntary for corporations.)

This commentary will explore some of these similarities and gaps between SASB and GRI to help corporate reporters better understand how these standards can be utilized for a company in the Agriculture Products Industry to report their environmental, social, and economic impacts more effectively.

At first glance, I found that the GRI Standards appear to seek more in-depth disclosures for some topics that they share in concept with the SASB Standards — but as a whole, the SASB Standards provide a more comprehensive view of agricultural practices due to the industry-specific disclosures and components suggested in its recommendations. These are not covered in as much depth under the GRI Standards.

As an example, SASB and GRI both include Greenhouse Gas (GHG) Emissions as an area for disclosure, and the disclosure of GHG emissions suggested by the two Standards’ organizations both account for Scope 1 emissions and biogenic carbon dioxide emissions.

Similarities and Differences to Consider

However, although SASB asks agricultural organizations to describe their long-term and short-term strategies of managing Scope 1 emissions and emission-reduction targets—something that is not specifically outlined under the GRI’s Emissions Topic Disclosure — GRI does suggest organizations that choose to report on emissions include a management approach that is used to cover components such as the policies, commitments, and goals and targets as they relate to the reporting organization’s emissions.

GRI expects reporting organizations to provide a management approach disclosure (otherwise known as the DMA) for every material topic chosen, or else explain why the management approach was not included at the time of reporting.

While the discussion encouraged by the GRI’s DMA is similarly suggested for some of the topics covered by SASB, it is not found in the SASB’s emissions materiality topic. Many of the industry-specific disclosures included in SASB could thus be improved by being covered using this management approach section of the GRI.

Emissions and Energy Related Disclosure

The GRI Standard’s Emissions Topic Disclosure also has more topic-specific components available for reporting — such as Scope 2 and Scope 3 GHG emissions, emissions of ozone-depleting substances, and other significant air emissions.

In this way, the GRI Standards would appear to be more comprehensive for the emissions materiality topic that it shares with SASB.

The same observation is found in Energy, which is also available as a material topic under SASB and a disclosure topic in the GRI Standards.

SASB Standards suggest reporting organizations disclose their consumption of operational energy fleet fuel — both of which are also covered under GRI’s topic-specific categories of energy consumption within and outside of the organization.

Both GRI and SASB also account for the amount of energy reduced through the use of renewable energy.

However, GRI Standards additionally ask reporting organizations to disclose their energy intensity and the reductions in energy requirements of sold products and services achieved during the reporting period.

Since this topic will be coupled with a management approach under the GRI, the organization’s Standards would appear to cover more ground than SASB Standards in the Energy topic disclosures, since this discussion is not required for the Energy material topic under SASB — however, the company could choose to disclose it in the DMA section.

Addressing Labor/HR Issues

Suggested disclosure content that relates to labor is also more extensive under GRI than SASB.

SASB Standards cover Food Safety and Health Concerns as it relates to the number of recalls issued and strategies used to manage genetically modified organisms (GMOs) and Fair Labor Practices and Workplace Health and Safety (as it pertains to whether farms are certified for fair labor practices, the data on injury rates, and how to assess, monitor and reduce exposure of employees to pesticides).  In comparison, the GRI Standards offer 19 available Social topics for companies to report on.

In particular, the labor/management relations and occupational health and safety topic specific disclosures share some overlap with those of SASB.

These topic-specific disclosures under the GRI Standards also suggest that companies report on hazard identification, risk assessment, promotion of worker health, prevention and mitigation of occupational health and safety impacts, and work-related injuries.

Agriculture-Specific Issues

SASB does take a more agriculture-focused approach because it asks specifically for data on topics such as recalls, GMOs, and farms certified for fair labor practices; these are not similarly asked for under the GRI Standards.

The Land Use and Ecological Impacts, Climate Change Impacts on Crop Yields, and Environmental and Social Impacts of Ingredient Supply Chains material issues identified by SASB are other examples where SASB takes a more comprehensive approach to reporting for the Agricultural industry’s specific issues.

These SASB Standards disclosures ask organizations to report on topics such as the amount of crop yields/lost, percentage of agricultural raw materials certified to third-party environmental/social standards, amount of pesticide consumption by hazard level, and volume of wastewater reused/discharged to the environment.

The available disclosures following the GRI Standards do not appear to directly encompass these agriculture-specific components (even in the GRI Food Processing Sector Supplement), making GRI reporting as a whole appear to be not as comprehensive for the Agriculture sector — despite GRI requiring more detail for those disclosures that do intersect with SASB.

Agricultural organizations that choose to report without following SASB Standards and / or the Food Processing Sector Supplement may, therefore, result in a more restricted view of those organizations’ agriculture-specific practices — despite them being in line with GRI Standards reporting.

My Conclusions

Moving forward, corporations in the Agricultural sector can improve their sustainability reports by using both the GRI Standards and the SASB Standards for the collection, measurement, analysis and reporting of their environmental, social, and economic data.

This integrative approach to reporting would enable corporations to create a much more comprehensive sustainability report, by allowing the enterprise to take advantage of both SASB’s industry-specific disclosure recommendations and GRI’s broader topic-specific recommendations.

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Note about GRI’s Sector Disclosure — from the GRI’s website FAQ: “With the transition from G4 Guidelines to GRI Standards, the G4 Sector Disclosures remain valid. The use of the G4 Sector Disclosures is recommended for organizations using the GRI Standards, but is not a requirement for preparing a report in accordance with the Standards (see GRI 101: Foundation, Section 2 for more detail).”

Note:  This commentary is part of a series sharing the perspectives of G&A Institute’s Analyst-Interns as they examine literally thousands of corporate sustainability / responsibility reports.  Click the links below to read the first post in the series which includes explanations and the series introduction as well as the other posts in the series: