Despite Heightening Investor Pressure, Few Companies Publicly Report on Sustainability, Sphera’s New Survey Finds GlobeNewswireDespite Heightening Investor Pressure, Few Companies Publicly Report on Sustainability, Sphera’s New Survey Finds GlobeNewswireDespite Heightening Investor Pressure, Few Companies Publicly Report on Sustainability, Sphera’s New Survey Finds GlobeNewswire
Impact Investing Forum 2022
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CHICAGO, Sept. 30, 2021 (GLOBE NEWSWIRE). Despite growing pressure from all sides–from investors to governments to boards of directors-companies around the world struggle to report progress towards their Environmental, Social, and Governance (ESG), goals. According to Sphera(R), Sphera(R) is a global leader in ESG performance and risk management software and data, and provides consulting services. A new survey found that only 38% of businesses have publicly reported their sustainability performance.
It’s not about revealing progress on their objectives; however, companies are often behind the curve when it is time to set their ESG goals. Only 29 percent of respondents reported that they had communicated their sustainability goals. Even fewer, 16%, said they had set their emissions targets in line with the Science Based Targets Initiative (SBTi). This glaring lack of transparency in ESG reporting highlights the gap between ESG promises made and actual actions taken by the private sector. Companies have been left to make voluntary commitments but without any meaningful mechanism to measure their progress or hold them accountable. Only 51% of companies (51%) said their senior management had made sustainability commitments. However, only 21% said they have a clear roadmap for implementation and 26% said they have fully integrated sustainability in their business strategy. Paul Marushka (CEO of Sphera) says that while it’s easy to talk the talk about corporate ESG initiatives, it’s much more difficult to actually do the walking. “Businesses have been left to establish and measure sustainability performance on their own, which has led to a constellation that disincentivizes meaningful action. The Intergovernmental Panel on Climate Change’s latest report is a strong warning. It warns that half-measures won’t cut it. And with the upcoming COP26 conference promising accountability to the business community, organizations must start delivering on their promises and making tangible progress. These are the results of Sphera’s Sustainability Survey 2021. This survey surveyed 218 global business leaders to evaluate their sustainability metrics, measurement, and progress. Scope 3 is missing from this survey’s findings. While reducing emissions across the value chains is crucial to meet decarbonization targets, and for those businesses that have committed to them, achieving net zero emissions is possible, very few companies have included Scope 3 emissions into their sustainability plans. Only 13% of businesses that were surveyed claimed to have identified all Scope 3 categories and performed a hotspot analysis. 29% said they take into account the entire value chain in calculating their corporate carbon footprint or baseline. Marushka said that Scope 3 emissions can account for the majority of a company’s carbon footprint. She added that any sustainable strategy must include an assessment of the supply chain, and a commitment of working with suppliers who are taking measurable steps towards reducing their emissions. Both companies will see a multiplier effect as a result. Even the best efforts can be hampered by poor data quality. Only 16 percent of respondents use data from commercial databases to calculate their corporate carbon footprint. Another 14% use industry-based data to assess baseline at the product level. This means that many organizations are using suboptimal data sources, such as input-output, spend-based databases, to measure their carbon emissions. These types of non-specific, top-down data sources can lead a poor assessment, further eroding the gap between sustainability outcomes and promises. The middle market is the most vulnerable. It is not surprising that large organizations with more revenue than $1 billion are more likely to be rated optimized (34%), in terms of sustainability maturity. However, only 39% of small businesses have less than $100 million in annual revenue and are considered optimized. With a 30% optimization rate, midsize businesses are behind both. Midsize businesses are more likely to meet basic compliance requirements than their larger or less successful counterparts (25% vs. 13% for smaller organizations, and 6% for larger organisations). The Sustainability Maturity Survey 2021
Sphera collaborated with the University of Esslingen, Germany, to design and conduct a survey of companies in Europe, North America, and Asia-Pacific. Respondents came from a variety of industries including construction, education and health care. The survey was conducted from April 7 to May 3. About Sphera
Sphera makes the world safer, more sustainable, and more productive. We are a global leader in providing ESG performance and risk management software, data and consulting services. Our focus is on Environment, Health, Safety & Sustainability, Operational Risk Management, Product Stewardship, and Safety. Contact us
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1 According to Sphera’s Sustainability Mature rubric, an “optimized business” uses ESG software and data resources to meet compliance requirements. This helps to find efficiencies, increase productivity, innovation, reduce costs, and mitigate risks. A “leader” is at top of its industry and shaping the future of its sector by its sustainability initiatives.
Despite Heightening Investor Pressure, Few Companies Publicly Report on Sustainability, Sphera’s New Survey Finds GlobeNewswire