The Working Woman’s Dilemma: A Look into Women in Corporate America

by Janis Arrojado, G&A Institute Analyst-Intern

Note: This is the second post in the blog series by Janis.  Click here to read the first post.

Although corporate America has made strides in promoting gender diversity in the workplace, there is still significant progress to be made. In the United States, a gender wage gap still exists, with on average women making 84 per cent of what men make. 85.8% of Fortune 500 CEOs are white men, showing a clear underrepresentation of women in corporate leadership positions.

The underrepresentation of women not only hurts women but also impacts corporate performance. Research has shown that companies with well-represented gender diversity in leadership are 50% more likely to perform better than their peers.

More inclusion of women can bring varied approaches to problems, increase employee satisfaction, and foster collaboration. Women in leadership positions benefit company culture as they are more likely to incorporate employee friendly practices and speak out about the importance of gender and racial diversity than senior-level men.

Causes of Underrepresentation

Unconscious gender bias can impact the perception of women in the workforce. Traditional notions of women being warm and nurturing can prevent women from moving up the corporate ladder, and on the flip side if women take charge and are assertive they are often perceived as overly angry or aggressive. These gender-role expectations can negatively impact hiring and promotion opportunities, which can impede a woman’s career progression.

Women also face the challenge of being more likely to have more demands at home, as mothers are three times more likely than fathers to do most of the housework and caregiving in their home. Research has also shown that women are significantly more likely to reduce their hours for child care compared to men. Women with these increased demands at home have increased risk of burnout and negative biases, also impacting career progression to a higher role in a company.

COVID-19’s Impact

COVID-19 has only exacerbated the increased demands at home for women. 50% of mothers who quit their job due to the pandemic said that one of the reasons was closure of their children’s school and/or daycare. Women are also more likely to care for elderly family members due to an overloaded health care system. Time spent doing unpaid labor of watching children, assisting with schooling, and taking care of family members can cause women to take time away from work or quit their jobs.

What Companies Can Do

Corporations have an important role to play in increasing the inclusion of women in the workforce. Opting in for gender-based unconscious bias training and shifting performance reviews to be more measurable and attainable is a start.

Transparency
Another step towards equity is for companies to disclose their gendered wage gap. Research has shown that the gender pay gap shrinks when companies are transparent about wage discrepancy between men and women. Choosing to communicate the difference between men and women’s earnings can spark the momentum for initiatives and policies to close the wage gap.

Clear Boundaries and Flexibility
The move toward remote working during the pandemic can cause women to always feel the need to be responsive and available. Companies communicating clear boundaries and establishing set times for work and meetings is a way to decrease burnout and exhaustion. Additionally, having flexible work and scheduling options can promote wellbeing amongst working women.

Accommodations
Providing accommodations for working mothers is integral to supporting women at work. Initiatives such as having a designated space for new mothers to breastfeed or pump, providing financial assistance with childcare or on-site childcare facilities can foster an inclusive environment for working mothers.

Paid Parental Leave
Offering paid parental leave for men and women is another important component of supporting women in corporate America. Mothers are more likely to return to their employer when they have paid maternity leave, and offering paid paternity causes a more even distribution of childcare and household responsibilities among mothers and fathers.

Paid maternity leave amongst members of the Organisation for Economic Co-operation and Development (OECD) averages around 14 weeks, excluding the United States. The United States is one of few countries that does not have a nationally mandated paid parental leave law, despite clear benefits. Establishing paid parental leave is a way for companies to promote gender equity, contribute to infant and maternal health, and foster familial economic security.

Mentorship
Creating a formalized women’s mentorship program provides a safe environment to discuss the challenges of navigating the workplace for working women. Mentorship is a way for mentors to serve as role models and representation, while fostering connections and career advancement. By recruiting women from all positions and having intentional pairings, mentorship gives women relationships and spaces that contribute to a positive working environment.

External Initiatives
Companies dedicated to advancing gender equality can sign the UN Women Empowerment Principles, which “are a set of Principles offering guidance to business on how to promote gender equality and women’s empowerment in the workplace, marketplace and community.” Corporations can signal to stakeholders and the public their commitment to empower women through business practices that promote gender equality.

Companies can also get involved with organizations that are taking initiative to increase representation of women in corporate leadership such as 30% Club, 50/50 Women on Boards, and Women Business Collaborative. Supporting NGOs that are striving to improve working conditions for women around the world like WIEGO and Care International is another way for businesses to empower and support working women.

Conclusion

Women make up nearly half of entry level roles in organizations across the nation, but the percentage of women decreases significantly moving up the corporate ladder. Companies need to address this underrepresentation and take initiative to cultivate a supportive and inclusive culture for women in the workforce.

ABOUT THE AUTHOR

Janis Arrojado is a senior at the University of North Carolina at Chapel Hill, studying Environmental Science and Geography.  Her interests include corporate sustainability, environmental justice, and sustainable development. She currently is an analyst-intern at G&A Institute.

 

Sources & References For More Information

Emerging Trends in Electric Vehicle Industry

By Noelani West, G&A Institute Analyst-Intern

No doubt you’ve noticed the increase of electric vehicles (EVs) on the road over the last few years. With more than 10 million EVs on the road as of 2021, compared to around 2 million in 2016. Some projections are that by 2050, EVs will account for over 60% of new car sales. With gas prices now at their highest since 2008 and increase concern over the use of fossil fuels, this is no surprise.

Tesla Motors might be the first company to come to mind when thinking of EVs. In 2008, Tesla released its first all-electric vehicle to the public – the Roadster. At the time, the vehicle’s bas price was around $100,000 USD, making the EV market quite exclusive. Now, one can purchase a Tesla Model 3 for half the price. At their 2020 shareholder meeting, Tesla’s CEO Elon Musk announced the company’s plan to produce EVs for prices in the future for as low as $25,000 – making it far more accessible to a wider range of consumers.

Now with a slew of other car companies jumping onto the EV bandwagon, and many at more affordable prices, it’s easy to say that the popularity of EVs will continue to soar.

These trends aren’t emerging solely due to consumer demand and a growing sense of environmental responsibility. Substantial government actions have been made to aid in the transition of the auto industry to EV. Part of President Biden’s Build Back Better Agenda and the Bipartisan Infrastructure Deal includes an Executive Order which sets a target of making half of all sold vehicles in 2030 zero-emissions vehicles. Actions under this order include supporting the development and deployment of EV charges throughout the country and increasing domestic manufacturing of EV batteries.

EV production slowed down during the Covid-19 pandemic as the entire auto sector severely hindered by decrease in demand and supply chain disruptions. Still, in 2020 the global EV stock increased 43% from 2019. China continues to lead the EV market, accounting for half of all EV sales. Europe has seen significant growth within the industry, more so than in many other regions. This is due to some substantial government propositions, such as the UK proposing a sale ban on all polluting vehicles by 2035.

The U.S. has overall had lower EV sales than in many other major regions, with Tesla being responsible for almost half of EV sales in the country. However, that trend can easily change with the new government regulations in the pipeline and car manufacturers vowing toward a more electric future. With the nationwide deployment of more charging stations and EVs being supplied at more affordable rates, car buyers can expect EVs to become more accessible. Global trends project an ongoing increase in demand and supply for EVs for the coming decades.

About the Author

Noelani West is a G&A Analyst Intern and currently a senior at Columbia University in the City of New York, pursuing her undergraduate degree in Sustainable Development. Through an array of interdisciplinary coursework, she has been able to explore how sustainability is applied to in various fields and sectors. This has reinforced in her just how crucial and relevant these topics are.

She hopes to launch a career in corporate sustainability, helping companies develop and implement ways to become more equitable and sustainable. Noelani is especially passionate about environmental sustainability as well as sustainability technology.

Role of Green Building Certifications in Telling Your ESG Story

By Kavya Dhir, G&A Institute Sustainability Analyst

With climate change at the forefront of today’s environmental, social, and governance (ESG) discussion, and corporate ESG disclosures in focus, companies are being held more accountable for their overall environmental impact.

These impacts include the carbon footprint of their operations — such as office space, business travel, and packaging of consumer goods.

For office buildings, third-party certifications such as the WELL Building Standard (WELL) managed by the International Well Building Institute (IWBI), and, Leadership in Energy and Environmental Design (LEED) managed through the US Green Building Council (USGBC), have ushered in a new era of sustainability transparency and accountability.

Green building standards have served as a foundation for more than two decades to make buildings become more energy efficient, less polluting, and healthier for their inhabitants. The USGBC was created in 1993 in the boardroom of the American Institute of Architects (AIA), with representatives from over 60 corporations and organizations.

Today, investment firms and property businesses are raising the bar for “green.” This includes increased greenhouse gas emission reduction targets and supply chain management regulations. Further, these organizations and individual assets are being expected to back up their ambitions with real-world performance data.

Green building standards should be promoted by real estate professionals to work to ensure that the advantages are widely recognized and implemented.

What is a Green Building?
According to the World Green Building Council (WGBC), the definition of a green building is: “a building that, in its design, construction or operation, reduces or eliminates negative impacts, and can create positive impacts, on our climate and natural environment.”

Here is a brief overview of the ESG issues that are involved:

Environmental – Energy, water, and material are three essential environmental components that have a significant influence on the natural environment over the lifespan of any construction.

According to the WGBC definition, the ultimate goal is not just to optimize resource use so that harmful impacts are reduced, but also to ensure that the building itself contributes positively to the natural environment.

Examples of positive impacts are if a building use recycled and reusable materials, has a greywater system that collects and uses rainwater, or has solar panels which feed excess energy back to the grid.

The societal pressure to adapt to meet the goals of The Paris Agreement on climate change has grown considerably. There is also pressure on the construction and real estate sectors to contribute significantly. In the future, making a good contribution to climate protection would include adhering to tight requirements including reducing the net primary energy need in the planning and construction of new buildings by 20% as compared to the ‘lowest energy level.’

Social A building is designed for occupants; therefore, it must consider their health, comfort, and safety. In office buildings, asking building management if they have engaged in any Indoor Air Quality (IAQ) certifications is a simple way to determine whether the facility has inadequate air quality which may trigger headaches, respiratory irritation, nausea, and allergies. Natural lighting has physiological effects that may be measured. The synchronization of the body’s internal clock – known as circadian rhythm, can be aided by exposure to adequate quantities of natural sunshine.

Governance – Facility managers must design metrics to monitor the health of a building in order to demonstrate effective governance in building operations, maintenance, and management. Furthermore, construction companies and operational managers should be obliged to set quantifiable objectives and demonstrate efforts in advancing the industry toward a beneficial influence on the environment to quantify how a building may do better.

To be considered to be really “green,” a building must serve as a link between people and nature. The ESG of buildings described above aren’t designed to oversimplify the industry’s complexity; rather, they’re meant to raise awareness and start dialogues about acceptable reporting standards. Investors are becoming more demanding in terms of accurate, transparent, and timely account of asset-level performance. The future of ESG reporting in real estate development will move far above entity-level disclosures.

About the Author

Kavya Dhir is a G&A Institute Sustainability Analyst.  Her role consists of conducting materiality assessments, gap analysis and benchmarking research. A researcher and a lifelong learner at heart, Kavya is a LEED GA, WELL AP and holds a bachelor’s degree in Civil engineering and a MSc. In Design and Energy Conservation.

She is involved with many organizations, including ASHRAE, U.S Green Building Council, UN Green (R)evolution and ISHRAE.

She is an optimist who looks towards a future in which our built-environment and energy production exist in harmony with us and the natural world.  Kavya has experience with projects which integrate concepts of net-zero energy and carbon, high performance HVAC and healthy buildings, and general sustainability early in the building design process.

Kavya is committed to accelerating the transition to a more sustainable environment with a continual focus on establishing the integrated bottom line: environmental stewardship, economic inclusion, and social equity.

REFERENCES

Contributor, G. (2021, June 21). Synergies Between LEED, WELL Certifications And ESG Programs. Facility Executive Magazine. https://facilityexecutive.com/2021/06/synergies-between-leed-well-certifications-and-esg-programs/

Dolya, A., Romanin, P., Weise, D., Lupia, F. P., Villani, L. A., & Hemmige, H. (2022, January 11). Boosting ESG Performance in Today’s Energy Supply Chains. BCG Global. https://www.bcg.com/publications/2022/boosting-esg-performance-framework

A Performance-Based Future for Real Asset ESG Reporting. (2019, February 28). GRESB. https://gresb.com/nl-en/2019/02/28/a-performance-based-future-for-real-asset-esg-reporting/

What is green building? (2020). World Green Building Council. https://www.worldgbc.org/what-green-building

Why Sustainability Must Be Centered On Environmental Justice

Part 2 – Companies Doing it Right

By Gia Hoa Lam, G&A Institute Analyst-Intern

Sustainability and environmental justice are interdependent. In the same manner as sustainability solutions, environmental justice solutions are specific to a company’s unique operations and community, encompassing a wide range of environmental, social, and economic considerations. Following are a few examples of companies that are incorporating environmental justice in their ESG and sustainability programs.

These companies combine their business goals with equity goals in a manner that reinforces one another. This way, environmental justice and sustainability become defined by the opportunity to expand and innovate rather than solely focus on risk mitigation and compliance.

Timberland

Timberland has been in partnership with the Smallholder Farmers Alliance (SFA) of Haiti for over 12 years. Haiti is one of the most deforested countries in the world, with an estimated 1.5% tree cover (by comparison, the Dominican Republic has 48% tree cover and U.S. cities have an average of 27% tree cover).

This deforestation has major ramifications for Haiti’s biodiversity, vulnerability to natural disaster, and economic potential. Through its partnership with SFA, Timberland has planted over 7.5 million trees and supported programs to train local farmers.

The cooperative model has led to a 50% increase in farmer income and 40% increase in crop yield. With the help of Timberland, cotton has been re-introduced to the island with potential of becoming a major export. Timberland is seeking to expand the program and gain additional support from parent company VF Corporation.

Timberland, in supporting Haitians, is practicing environmental restoration and economic development. Timberland also supports the work of several NGOs focused on supporting local communities, including the Great Green Wall, Trees for the Future, the Green Network, Las Laguna Ecological Park, Justdiggit, and Treedom. Partnership with local support ensures Timberland’s efforts are connected with on-the-ground experts.

Microsoft

Microsoft has consistently been a leader in ambitious environmental goals with a commitment to carbon neutrality by 2030 and net zero by 2050 (removing from the environment all carbon the company has emitted either directly or by electrical consumption since it was founded in 1975). To meet these ambitious goals, Microsoft is seeking aggressive carbon reductions through its operations and scaling carbon removal. Its 250-megawatt power purchase agreement with black-owned Volt Energy shows the possibility of combining environmental goals, sustainable procurement, and racial justice.

Volt Energy also commits to “invest[ing] a portion of the revenue from the Power Purchase Agreement in community impact funding initiatives, which will support programs that bring the benefits of renewable energy closer to communities that have not been significantly included in the wave of clean energy initiatives undertaken by the private and public sectors.” In this manner, supporting a sustainable economy can also mean supporting an equitable economy.

CVS Health

CVS has committed $1.5 billion to social impact investment with an understanding of racial disparities in health outcomes and environmental health. To achieve the company’s goal of healthy communities, CVS is focusing on access to health care, social determinants of health like housing and food security, and supporting local health organizations.

CVS practices a multi-stakeholder approach by mapping the most vulnerable to disparate health outcomes, senior citizens, Black communities, and Hispanic communities. Initiatives such as partnership with the Conference of National Black Churches to improve immunization rates shows a commitment to meeting underserved communities where they are and understanding historical contexts to disproportionate health outcomes.

Project Health is another program that provides basic screening services such as blood pressure, body mass index, and glucose testing to the uninsured, along with information for customers looking for mental health and follow-up care resources. CVS thus aligns its expansion strategy with an environmental justice goal, understanding the economic and restorative opportunities within health care.

ABOUT THE AUTHOR

Gia Hoa Lam is a G&A Institute Analyst-Intern. Due to his previous work as a corporate sustainability intern at Ceres, a sustainability nonprofit, Gia Hoa has sustainability consulting experience across multiple industries from sustainability planning for the apparel industry to analyzing human rights policies for investment banks. On campus, Gia Hoa is a founding member of Bentley University’s Green Revolving Fund, facilitated the Bentley 2026 Sustainability & Climate Action planning process, and is currently advocating for endowment stewardship.

Gia Hoa centers people in his sustainability work with a deep passion for climate justice, DEI, and climate refugees. Initially interested in psychology, Gia Hoa realized mental wellbeing was directly linked with access to environmental and social resources. Thus, he began his journey to be a change leader through stakeholder engagement and facilitation. He believes the corporate world has the capacity for compassionate and collaborative change.

An Overview of Corporate Diversity, Equity & Inclusion

By Janis Arrojado – G&A Institute Analyst-Intern

Diversity, equity, and inclusion (DEI) initiatives are integral to creating a positive working environment. Diversity refers to increasing representation from marginalized groups, while equity means ensuring all individuals have what they need to succeed, and inclusion is creating an environment where different people and perspectives are valued and integrated into an organization.

Companies benefit from DEI efforts, and it has been found that companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns higher than their competitors.

Companies incorporating DEI into their actions align with the United Nation’s Sustainable Development Goals (SDGs) — specifically SDG 5 (Gender Equality), SDG 8 (Decent Work and Economic Growth), and SDG 10 (Reduced Inequalities).

Representation and inclusion are important for underrepresented identities, and it is important to understand barriers in the workforce for different communities. Companies seeking inclusion should consider obstacles in place for various identities:

  • Ethnicity/Race – Many companies struggle with racial and ethnic discrimination, with US $74.8 million collected from employers in the U.S. in 2020 due to racial discrimination violations. As company leaders in the U.S. are overwhelmingly white, long-standing company culture, norms, and policies can cause isolation, microaggressions, job dissatisfaction, and a lack of support for members of underrepresented races and ethnicities.
  • Gender – In the workforce, women continue to be underrepresented in every level of career progression. As organizations endeavor to have more gender representation throughout, it is important to recognize the barriers that women face in the workplace. Women often face discrimination in hiring, bias in performance evaluation criteria, and prejudice in navigating professional settings, and women of color in particular are more likely to experience these issues.
  • LGBTQ+ – The LGBTQ+ acronym encompasses members of the lesbian, gay, bisexual, transgender, and queer community. Although many consumer brands have publicly supported the LGBTQ+ community and have partnered with LGBTQ+ pride events, there is still a long way to go. Only four CEOs who are openly LBGTQ+ lead America’s top corporations, with only one who is female. In the workforce, people with LGBTQ+ identities face issues with sexual harassment, isolation, inappropriate comments, and career progression.
  • Age – Age is often left out of DEI efforts, with more than half of 6,000 global employers answering in an AARP survey that they do not have a specific DEI policy for age. Age discrimination can be for people considered “too young” or “too old” for a role. For older members of the workforce, harmful stereotypes about older workers not being skilled with technology and being closed off to change lead to an age bias.
  • People with Disabilities – Research has shown that one in four Americans have some type of disability, which can be visible or invisible. To truly create a diverse and inclusive company, corporations need to focus on employing and providing support to people with disabilities. People with disabilities are severely under-employed and are twice as likely to be unemployed than people without disabilities. People with disabilities have many barriers in the workforce, including lack of accommodation, hiring discrimination, and exclusion.

Looking Forward

It is becoming increasingly important that corporations reflect the diversity of the population of America. Having DEI initiatives is a start to creating an equitable environment for underrepresented identities.

Author

Janis Arrojado is a senior at the University of North Carolina at Chapel Hill, studying Environmental Science and Geography.  Her interests include corporate sustainability, environmental justice, and sustainable development. She currently is an analyst-intern at G&A Institute.

 

 

 

Sources / References for More Information

Why Sustainability Must Be Centered On Environmental Justice (Part 1)

By Gia Hoa Lam, G&A Institute, Sustainability Analyst Intern

Alok Sharma, president of the COP26 climate summit, held back tears in his closing speech at the climate change conference in Glasgow last November. Many environmentalists felt dejected by late changes that seemed to weaken climate agreements, such as the “phasing down” rather than “phasing out” of coal or the delay in 1.5 degree C commitments.

However, commitments to environmental justice and supporting adaptation projects were strengthened and many nations doubled their contributions to adaptation funds and funds for developing countries.

Some businesses seem to have the opposite approach. Corporations today are leading the charge on GHG emissions reductions and disclosure, but we often see shortcomings on commitments to environmental justice. Environmental justice refers to the fair treatment of all people, regardless of race, color, national origin, or income, with respect to equal environmental protection.

Oftentimes new projects or plants that pose environmental impacts—regardless of industry—are located in areas where businesses believe there will be the least resistance from the community or are the cheapest to implement.

In the effort to avoid delays or to be cost-effective, vulnerable communities often bear the burden of environmental effects. These environmental effects can be anything from increased air and water pollution leading to respiratory issues to decreased land value and community deterioration.

In the U.S., the environmental justice movement first gained national attention with the demonstrations of hundreds of Black Americans in 1982 at Warren County, in the State of North Carolina.

The state bought land in Warren County to build a landfill to store 31,000 gallons of polychlorinated biphenyls, a known carcinogen and endocrine disruptor. The county’s citizens were predominantly Black and low-income. Nonviolent protests barring trucks from beginning construction of the landfill and marches to the state capitol led to 520 arrests. National attention and mobilization from environmental groups revealed the disproportionate health risks that minority and low-income communities face.

Researchers collaborated with environmental groups to begin studies into this disproportionate risk and found preliminary evidence that a majority of Black and Hispanic communities live in close proximity to one or more uncontrolled dumps.

The mainstream environmental movement finally responded to environmental justice action after an open letter was sent in 1990 to the directors of the ten largest environmental groups, charging them with a history of racist and exclusionist practices and a failure to support environmental justice efforts.

Today, more than 30 years later, systemic racism and inequity continue to affect disadvantaged communities greatly, beyond the scope of proximity to waste. Current risk assessments by federal agencies for programs do not effectively factor in procedural equity or identify vulnerable communities.

Infrastructure that pollutes local areas are often in close proximity to disadvantaged groups. Policy is therefore needed to curb emissions from vehicles and plants, while also avoiding latent issues that may harm the environment or long-term sustainability.

Cancer Alley refers to the predominantly Black and poor populations around the Mississippi River in the southern U.S. who are at greater risk of cancer, such as 30% higher risk for leukemia.

A study published in 2020 considered Louisiana to be, “one of the most toxic states, annually discharging 7.2 tons of hazardous waste per capita, and accounting for 12.5% of the country’s hazardous waste from only 6.5% of the nation’s chemical facilities”.

This toxic waste is often dumped into the Mississippi River from petrochemical plants, leading to high nitrates. Emissions from petrochemical plants have also led to high concentrations of formaldehyde and benzene.

The Clean Water Act does little to tackle non-point sources of effluence. The nitrates in the Mississippi River cannot be traced to any one petrochemical plants, or its proportional contribution to air pollution. Citizens looking to report these plants find it hard to sue because of this shared cause of damages.

Public policy changes are needed to ensure vulnerable communities are not withstanding the worst of environmental effects due to a lack of political resources that leads to zoning and land use decisions without proper input from those affected.

The growing body of evidence shows the largest determinants of environmental and public health are tied to the color of one’s skin. Additional inequities include higher risk for unsafe drinking water, less access to recreational areas, and fewer environmental grants.

The Institute of Environmental Science and Technology at the Universitat Autonoma de Barcelona have constructed an Environmental Justice Atlas, mapping environmental injustices across the world.

What Can the Private Sector do?

ABOUT THE AUTHOR

Gia Hoa Lam is a G&A Institute Analyst-Intern. Due to his previous work as a corporate sustainability intern at Ceres, a sustainability nonprofit, Gia Hoa has sustainability consulting experience across multiple industries from sustainability planning for the apparel industry to analyzing human rights policies for investment banks. On campus, Gia Hoa is a founding member of Bentley University’s Green Revolving Fund, facilitated the Bentley 2026 Sustainability & Climate Action planning process, and is currently advocating for endowment stewardship.

Gia Hoa centers people in his sustainability work with a deep passion for climate justice, DEI, and climate refugees. Initially interested in psychology, Gia Hoa realized mental wellbeing was directly linked with access to environmental and social resources. Thus, he began his journey to be a change leader through stakeholder engagement and facilitation. He believes the corporate world has the capacity for compassionate and collaborative change.

SEC Focuses Efforts on Climate-Related Corporate Disclosures

By Noelani West, G&A Institute Analyst-Intern

The last decade has seen a surge in sustainability reporting among the largest U.S. companies. Recently published research from G&A Institute revealed that in 2020, 92 per cent of S&P 500 Index® companies published sustainability reports or disclosures, compared to just 20% in 2011.

G&A’s research also determined that sustainability reporting within Russell 1000 Index® companies has been steadily increasing, with 2020 seeing 70% of those companies publishing sustainability reports, compared to 60% in G&A’s 2018 analysis.

This is an encouraging trend, especially considering that until now, sustainability reporting in the U.S. has been voluntary. This is not the case in other countries around the world, with the UK, Japan, New Zealand, and Singapore mandating that publicly-traded companies disclose climate-related information as well as diversity and human rights data.

Many of these countries use the Task Force on Climate-Related Financial Disclosures recommendations (TCFD) as a foundation for their mandatory disclosure policies.

In the U.S. the U.S. Securities and Exchange Commission (SEC) requires publicly-traded companies to disclose certain material business and financial information, but currently mandates very little ESG disclosure. However, in 2021 it was confirmed that SEC staff are developing ways in which climate and ESG-related disclosures can be enhanced among public companies.  These new policies are expected to be announced in 2022, so let’s take a look at some key statements from SEC staff to help companies know what this may mean for them:

  • In February 2021, the SEC’s Division of Corporation Finance announced an enhanced focus on climate-related disclosures in public company filings. This enhancement would build off guidelines established in the SEC’s 2010 Guidance Regarding Disclosure Related to Climate Change, which only require listed companies to disclose ESG issues that are deemed “material” to that company.
  • In March 2021, the SEC announced the formation of a Climate and ESG Task Force, whose primary focus is to identify ESG-related misconduct. The SEC also opened up a forum for public comments as they apply to potential new SEC disclosure requirements and how or if current regulations should be modified. SEC Chairman Gary Gensler reported in July that, “Three out of every four of these responses support mandatory climate disclosure rules.”
  • In June 2021, the S. House of Representatives, in a move backed by President Joseph Biden, approved a bill that would support the SEC’s efforts to require public companies to disclose climate-specific metrics. The bill, called the Corporate Governance Improvement and Investor Protection Act, would require publicly traded companies to periodically disclose information related to ESG performance metrics and would support the SEC by providing discretion to amend securities laws to build ESG disclosures into their standards. A section of the bill, titled the Climate Risk Disclosure Act of 2021, is directed at the SEC and requires the disclosure of information regarding climate change-related risks posed as well as strategies and actions to mitigate these risks. Specifically, issuers would be mandated to report direct and indirect greenhouse-gas emissions and disclose fossil fuel-related assets.

These proposed bills have not passed the U.S. Senate and while the specifics of a final bill are unknown, we have some idea of the impending changes and adaptations companies may need to make to their standard operating procedures relating to ESG reporting.

Companies that don’t already provide more holistic means of reporting their ESG data will need to prepare themselves to begin doing so.

To stay ahead and ensure they are best prepared for the upcoming new mandates, companies should first make the decision about which reporting metrics to use. Many companies opt for a combination of the Sustainability Accounting Standards Board (SASB) industry-specific metrics and those disclosures listed in the Global Reporting Initiative (GRI). The combination of the two frameworks provides a broad and standardized way for stakeholders to analyze data and make informed decisions. After metrics and reporting frameworks have been chosen, companies should next identify the gaps in the data they have already collected and the data they should disclose (as outlined in the different reporting frameworks).

The push for mandatory ESG reporting should not come as any surprise, as human rights and climate risks are at the forefront of society’s concerns, and investors are no exception. Investors are becoming increasingly more interested in ESG metrics of public companies so that they can make rational and informed investment decisions.

With societal ESG concerns continuing to grow, 2022 is sure to bring even higher percentages of corporate sustainability reporting. Whether it will be mandated by the SEC or not, companies should expect and be prepared for more stringent reporting requirements.

ABOUT THE AUTHOR

Noelani West is a G&A Analyst Intern and currently a senior at Columbia University in the City of New York, pursuing her undergraduate degree in Sustainable Development. Through an array of interdisciplinary coursework, she has been able to explore how sustainability is applied to in various fields and sectors. This has reinforced in her just how crucial and relevant these topics are. She hopes to launch a career in corporate sustainability, helping companies develop and implement ways to become more equitable and sustainable. Noelani is especially passionate about environmental sustainability as well as sustainability technology.

The Aftermath of Rana Plaza: Sustainable Fashion Organizations

By Lauryn Power, G&A Institute Analyst-Intern

The issues of sustainability and just labor rights in the fashion and clothing industry were brought to the world’s attention in April 2013 by a tragic event in Dhaka, Bangladesh. On April 23, 2013, cracks were found in an eight-story factory building known as Rana Plaza, which hosted factories for many different industries. Many workers were sent home.

Then, on April 24th garment workers and managers were fighting over whether workers should go into the building and work. Workers were threatened with withheld pay if they did not work that day, so they ultimately went in.

A few hours later the building collapsed, killing over 1,100 people and severely injuring over 2,500.

The Rana Plaza collapse stands as a turning point in how the fashion industry worked with their supply chains. For decades before, incidents and disasters had been coming to light with little worldwide recognition or change on the part of clothing and fashion brands, which had a ‘don’t ask’ policy.

This event shifted the world’s attitude towards brands’ unwillingness to check their supply chains and forced them to take a more active role in how their supply chain is run.

Those workers were killed in the name of “cheap clothing.” Rana Plaza was found to be overcrowded with people and machines, set up in dangerous locations threatening the structural stability of the building. Over 29 major fashion brands were implicated in this incident. The entire world was watching this event unfold and raised questions of who is to blame and how this could have even occurred.

Soon after the collapse, Bangladesh instituted the Accord on Fire and Building Safety which over 200 brands signed. It set up plans for stricter fire and safety inspections, compensation from brands to improve factory conditions, banned brands from working with factories that did not comply, and set up anonymous reporting for workers.

28 major fashion brands came together to form the Alliance for Bangladesh Workers and set action plans for new inspection training and protocols.

Both of these accords did make major changes to factory standards, and over 130,000 safety violations were uncovered and corrected. Many factories had to provide more unobstructed ways of exit and were forced to remove gates which had been in place to keep workers on factory floors. Over 50 factories were shut down completely, and these initiatives protected over two million workers.

While these programs made major changes for garment factory workers, they often seemed more like bringing these factories up to the bare minimum standards. In the years since, many non-profits and other organizations have centered their goals around providing factory workers with just labor rights and supporting those in need.

Moving Forward

Fairtrade International is one of the most well-known nongovernmental organizations working towards “just labor rights.” This organization is co-owned by more than 1.8 million farmers and workers who strive to ensure that consumer goods across many industries are made in accordance with rigorous ethical standards.

Their key priorities span across all workers’ rights including child labor and forced free labor, mitigating climate change impact for workers, decent livelihoods, protection of the environment, and gender equality. Thus, they implement strict standards for all products which attempt to be Fair Trade Certified™.

For textile certification, workers must be paid living wages, understand their legal rights to allow them to unionize, have elected representatives to voice concerns, have safe working spaces, and have reasonable working hours. Fairtrade works with hundreds of fashion brands including Ralph Lauren, PACT, Patagonia, Athelta, and J. Crew.

Many other organizations were founded to focus on one specific issue within the garment industry. The Sustainable Apparel Coalition (SAC) attempts to unify all these issues and help brands track and fix them within their own operations. Their goal is to develop a sustainable consumer goods business model based on collaboration between organizations and expert leadership.

SAC works with Higg Co and the Apparel Impact Institute to set their foundations and goals for brands, using the Higg index which takes into account many factors including climate change, water and chemical usage and just labor rights. SAC has many partners including Allbirds, Everlane, LL Bean, Levis, New Balance, Patagonia, and Walmart.

Even more organizations are seeking to force brands to focus even deeper into their supply chains by checking fiber source and hazardous chemical use. While not impossible, certain standards are difficult for brands to enforce.

For example, paying living wages is often restricted by the local government’s minimum wages. Also, many factories are producing garments for multiple brands so even if one brand was willing to simply pay more to ensure living wages, it may not be enough to cover the costs for the other brands. There is also no way of ensuring that money will filter down to workers. As a rule of thumb, consumers can look for brands who do work with Fairtrade International and SAC; I see this as a good way to try to ensure certain worker standards are being met.

Labor rights in Bangladesh have come a long way since the tragedy, but injustice is still occurring everyday. The Rana Plaza collapse wasn’t the first labor rights disaster and it likely won’t be the last. With globalization, it is easier for these types of critical issues to slip through the cracks, so there is still a lot of work to be done to create equitable and just working conditions globally.

ABOUT THE AUTHOR

Lauryn Power is a G&A Institute Analyst-Intern, currently pursuing a MS in Sustainability in the Urban and Environmental Planning department at Tufts University. She has a BS in Chemistry from the University of Virginia where she also earned a minor in Mathematics. She also received a certificate in Business Fundamentals at the McIntire School of Commerce at the University of Virginia.

She has worked in various chemistry research labs and has a scientific background on climate change. She also has experience in sustainable fashion. She interned for the U.S. Green Chamber of Commerce doing research on current issues with fast fashion globally.

Through her educational background and experiences in the industry, she hopes to work in the intersection of sustainability and business, helping corporations to improve their practices and find ways to make their business more sustainable.

Common Sustainability Reporting Standards Remain Elusive

December 21, 2021

by Bernie Kilkelly – VP and Director of Corporate ESG Disclosure, G&A Institute

Efforts by various international organizations to develop common global sustainability reporting standards continue to run into roadblocks, as different groups propose diverging approaches and methodologies to enhance ESG disclosure.

As reported by Responsible Investor (link below in our Top Stories), the G7 Impact Taskforce that was created in July (under the UK’s presidency of the G7), recently commented about reporting standards being developed by the International Sustainability Standards Board (ISSB), an even newer group launched at COP26 in Glasgow.

Rather than helping to find common ground around simplifying the alphabet soup of reporting frameworks and standards, the comments by the G7 Impact Taskforce (ITF) seemed to add to concerns that reporting standards could become more fragmented.

The ITF said it supports the approach of the ISSB, which is governed by the International Financial Reporting Standards (IFRS) body, to develop a global reporting baseline focusing on the impact of sustainability factors on company enterprise values.

But at the same time, it recommended that countries “build upon this” approach to include other impacts on stakeholders that this reporting baseline would not address.

The ITF’s comments seemed to show support for the broader “double materiality” reporting approach that focuses on the impacts of business activities on society and the environment.  The “double materiality” approach is being used by the European Union’s accounting body —  the European Financial Advisory Group (EFRAG) — to develop a new set of corporate sustainability disclosure standards.

While the ITF’s statement calls for mandatory impact accounting for businesses and investors that would include “harmonized standards,” the elusive search for a common global approach to sustainability reporting continues.

As we close out 2021 and embark on a New Year, the G&A Institute team will continue to monitor the efforts of these organizations and help you make sense of the ever-changing world of sustainability reporting and disclosure.

Best wishes from the G&A team to all for a Happy New Year!

Top Stories

It’s Here: G&A Institute’s “2021 Sustainability Reporting in Focus” Trends Report

November 30, 2021

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

Our annual in-depth review of corporate sustainability / ESG reporting trends is  available for your reading. In our 2021 report, you will find detailed analysis of the reporting trends of the S&P 500® Index companies and Russell 1000® Index companies, showing shows that ESG reporting is increasingly being adopted by mid-cap companies.

This is the 10th anniversary of G&A’s annual research on sustainability reporting trends of the largest U.S. publicly-traded companies.

Governance & Accountability Institute, Inc. was established in 2006-07 by a team who had worked together at other management consulting firms.

Since our founding we have been focused on the world of corporate disclosure and structured reporting (and trends), and the increasing transparency (voluntary or not!) of publicly-traded firms for several decades.

The adoption of Sarbanes-Oxley (SOX) package of laws and rules and later Dodd-Frank (DF) rules brought many changes to corporate disclosure in the years following their passage — and significantly shaped the work we do with our client companies.

Our firm’s launch coincided with the morphing of what had been “socially responsible investing” (SRI) into today’s “sustainable and responsible investing” and with the emergence of more cohesive forms of evaluating a company’s corporate sustainability, citizenship, social responsibility… the format we recognize today as “ESG.”

The Global Reporting Initiative (GRI) noticed our work in analyzing and publicly sharing considerable information about best practices in corporate reporting and in 2010 invited G&A to be its Data Partner for the U.S., U.K., and Republic of Ireland.

The work we did in collecting and analyzing literally thousands of corporate reports from 2010 to 2020 helped us in our work with companies, helped GRI to expand its visibility and appeal to the American corporate sector, and helped corporate managers who selected the GRI framework for their reporting.

And a special thank you to our treasured colleague Mike Wallace (then head of GRI operations in the U.S.) for helping to make this happen!

As we gathered and analyzed corporate sustainability reports, we paid close attention to the companies included in the S&P 500 Index® – the preferred benchmark for the majority of asset managers.

In 2011, we released our first report analyzing the sustainability reporting of the S&P 500 companies for the publication year 2010, which showed that just 20% published sustainability reports or disclosures.

Great progress:  Our 2021 report shows that 92% of the S&P 500 companies published a sustainability report in 2020, demonstrating that corporate sustainability reporting is clearly a best practice for the largest companies.

Two years ago, we expanded our research to the next 500 largest public companies in market cap size, as represented in the Russell 1000® Index — another very important benchmark for investors. This was a heavy lift for our research team, and for our 2021 report the COVID-19 crisis created its own headwinds.

The results of the in-depth research of our great research team are now available in the “2021 Sustainability Reporting in Focus” trends report. We will stop the backgrounding here and invite you to dive into the report to do your own analysis. It is our Top Story of the week. Please do let us know your comments and questions as you examine the trends.

Our annual reports on corporate ESG disclosure trends have wide readership and long shelf life and have proved useful in informing corporate sustainability managers as they develop their own company’s sustainability report.

It has been a long and rewarding journey for us, these past 10 years of “deep diving” on U.S. corporate sustainability / ESG reporting trends – thank you to all who have followed us as we shared the annual reports with you. And so let us know how we can improve the 2022 report – now underway!

Top Story/Stories