Today’s companies face substantial pressure from stakeholders—both internal and external—to monitor and report on a variety of environmental metrics. The benefits to the company are clear, as research shows that successfully managing a company’s environmental footprint can strengthen a firm’s financial performance[i], help them maintain that performance over the long term[ii], improve the company’s image,[iii] and identify and mitigate potential risks to operations.[iv]
The following is excerpted from The State of Corporate Citizenship 2017. To learn more about how you can prioritize the corporate citizenship issues that are most important to your stakeholders and business context, consider joining online from February 20-April 17, 2017 for our Materiality: Determining Priorities for Corporate Citizenship Strategy and Reporting course.
While the 2017 State of Corporate Citizenship shows a declining interest in formal stakeholder engagement among executive respondents, engaging with both internal and external audiences can be an important component of any corporate citizenship program. Through stakeholder engagement, companies can fully understand their social, environmental, and economic impacts, and prioritize the issues that are most important to both stakeholders and their business context.
Many companies, like CBRE—the world’s largest commercial real estate services firm—use the insights they gather from stakeholders to inform a materiality assessment, creating a roadmap for more strategic time and resource allocation, and more comprehensive reporting.
“To improve is to change, to be perfect is to change often.”—Winston Churchill
Investment in a stable and prosperous society is an investment in future business performance. We’ve seen corporate commitment to this ideal in action during the development and ratification of the 2015 Paris Agreement, the adoption of the Sustainable Development Goals (SDGs), and in the fight for U.S. marriage equality. More and more, companies are vocalizing their support of environmental, social, and governance (ESG) issues—and are executing strategic plans to create the change they know is required to achieve a sustainable economy.
The emerging U.S. policy agenda could make the work even more challenging than it has been for the last decade. Especially if it is in conflict with the policies of global market economies in which your company likely operates. So what is to be done? Cling tightly to your coffee mug that reads, “stay calm and carry on” and do just that. There is overwhelming scientific consensus that climate change is real and human induced and socio-economic research that underscores the social ills that accompany inequality. The companies that have the courage to be among the first to make real commitments to improving the environmental and social conditions in their operating environments are the ones that have the opportunity to use those commitments as positive differentiators with institutional investors, customers, and the general public.
Last month, leaders from around the world gathered in Marrakesh, Morocco to build on the tremendous achievement of the 2015 Paris Agreement during COP22. There, they recommitted to a collaborative target-driven effort to limit climate change. During the conference, 11 countries—including Italy, Japan, Malaysia, and Pakistan—ratified the Paris Agreement, bringing the total number up to 111, far more than the 55 countries covering 55 percent of global GHG emissions required to elevate the accord to international law. The United States, Canada, Mexico, and Germany released strategies for radically cutting their greenhouse gas emissions by midcentury. The U.S. report outlines plans to meet an 80 percent reduction in emissions from 2005 levels by 2050, referencing an ambitious transition to a low-carbon energy system and innovative carbon storage and removal tactics.
In 2015, corporate citizenship took unprecedented steps forward. Multiple stakeholders—including business leaders—came together to commit to combating climate change and ensuring sustainable progress. The resulting United Nations Sustainable Development Goals (SDGs) represent years of work and hope. With 17 objectives and 169 specific targets that address issues ranging from education and inequality to economic growth and the environment, the SDGs are encompassing.
Watch: 'We The People' for The Global Goals
To keep up with global trends and challenges, GRI continually refines its guidelines, employing a multi-stakeholder approach to ensure that the reporting tool aligns the current needs of companies with the needs of society to better support meaningful change through corporate action. This year, GRI is transitioning G4—its most comprehensive and up-to-date reporting framework—from guidelines to standards, and has proposed three Universal Standards, as well as 35 Topic-Specific Standards. The organization is in the process of receiving feedback from global stakeholders on its draft Standards, having released them in April.
This spring, the Securities and Exchange Commission (SEC) opened for comment a review of its Regulation S-K filing—inviting comment on both form and substance of disclosures for companies listed on U.S. stock exchanges. Among many other matters, the SEC consultation document sought comment on whether disclosure on sustainability and other matters related to social policy should be mandated.