Environmental, Social & Governance Briefs

The Conference Board recently released its annual study on the state of corporate sustainability disclosure around the world. The research assesses environmental and social disclosure practices of the 250 largest publicly traded companies domiciled in each of the 10 largest economies (by GDP at purchasing power parity) in North America, Europe and Asia-Pacific. As we look to Asia, what are key trends in reporting practices across the region? Where do we see the biggest challenges ahead?

Research on corporate sustainability reporting finds that large U.S. companies, even in the absence of domestic nonfinancial reporting requirements, are more transparent than their peers in much of the world. Sustainability disclosure by U.S. companies is largely driven by pressure from stakeholders.

Key trends related to the corporate disclosure of environmental and social practices in Europe

Central and Eastern Europe (CEE) is the region with perhaps the most severe shortage of labor in the world. Many companies with operations in this region are running into hiring difficulties and labor costs are rapidly rising. While a problem for companies, workers are benefiting and taking home large real wage gains.

Despite research suggesting most consumers feel that businesses should take an active role in driving social and environmental changes, in 2019 companies are likely to tone down their public advocacy. As companies plan for 2019 with a divided government in Washington, it could be important to navigate new policies and regulations with dialogue on the issues.

Collaboration between humans and machines can make our online communities much more vibrant and relevant. Companies looking to understand and engage with customers through online communities need to consider how artificial intelligence and human collaboration can be used together to augment understanding of data and advance know-how.

Despite not understanding how Silicon Valley works, hundreds of corporations have started Silicon Valley innovation labs because they know that digitization is rapidly changing everything, and their corporate cultures are too siloed, insular, slow to accept, slow to use, and slow to commercialize the innovation they desperately need to survive.

Findings from a global study of corporate sustainability reporting reveals that companies in Japan have the highest overall sustainability disclosure rate. The findings raise the fundamental question of why companies report and whether reporting regulations are incentivizing compliance over substance.

The unemployment rate may be overestimating current labor market tightness. An exercise on monthly employment changes shows that 63 percent of all newly employed people aged 25 to 54 in October 2018 were not actively looking for a job in the previous month. If employers are looking for slack in the labor market, they should find better ways to source and recruit the people who are not looking for work and allegedly not willing to work.

Leading businesses are turning to purpose to articulate their mission, power growth, unite and motivate the organization, and become future-ready in a world of non-stop change. Companies can and should use purpose intentionally to figure out how to run their businesses.