Report highlights diversity in use of standards for ESG reporting.
An increasing number of US firms are publishing sustainability reports, according to a new study by ESG and sustainability research firm Governance and Accountability Institute.
According to the report, 65% of companies listed in the Russell 1000 published sustainability reports in 2019, up from 60% in 2018.
While larger US companies are increasingly reporting on their sustainability practices, the proportion of firms doing the reporting declines as the sample increases to include smaller entities.
Data from the report reveals that 90% of the largest 500 companies in the index by market cap published sustainability reports in 2019, compared with 86% in 2018. But among the smaller 500 companies by market cap, only 39% published reports in 2019, up from 34% in 2018.
Another key takeaway from the report is that firms have taken varied approaches with their reporting, aligning with “more than one, if not all” of the mentioned frameworks.
Almost half (47%) of the reporting companies used the Global Reporting Initiative (GRI) standards, and close to a quarter (23%) referenced or aligned with the Sustainability Accounting Standards Board (SASB).
Reporting companies mentioning or aligning with the Task Force on Climate-related Financial Disclosures (TCFD) stood at 14%, with 4% reporting a detailed alignment.
Four in ten firms (41%) said they had responded to the CDP’s Climate Change questionnaire, and 32% of reporting companies aligned with the UN Sustainable Development Goals (SDGs).
This latest evidence of fragmentation in reporting standards – which can weaken the usefulness of sustainability reporting as it makes comparing and investment decision-making tougher – comes as standards-setters for sustainability increase their efforts at coordination. Last month, reporting bodies including SASB, GRI, TCFD and CDP agreed last month to work together to develop a single set of standards.