Sustainability Briefs

There has been dramatic growth in ESG (Environmental, Sustainability and Governance) investing during the past 20 years – but along with this positive trend comes an equally dramatic rise in ESG reporting requirements, and a proliferation of rating agencies and assessment tools.

Embedding sustainability into the supply chain makes good business sense. Embracing sustainable procurement practices can help companies manage business risks, achieve costs savings through material efficiency gains, enhance their brand reputation, and manage suppliers more effectively. But success requires a focus on real-world impact rather than inputs and activities.

Existing company disclosure practices provide the foundation to implement the TCFD’s recommendations Precedent in oil & gas shows reporting at the level of the four principles (governance, strategy, risk, metrics) can be done. Reporting on the 11 specific recommendations will be more challenging, however, none of these are impossible to meet. Climate change is a systemic issue and investors need system-level data. Which means data from all listed companies and eventually the large private ones.

Populism, nationalism, trade wars, March for Our Lives, and the #MeToo movements, among others, are reshaping how people, governments and nonprofits respond and interact with companies, and with each other. In a recent speech to corporate citizenship professionals in New Orleans, I painted a picture of how our crazy world impacting our roles as corporate philanthropists and responsibility practitioners, as internal and external stakeholders put more pressure on us to show value.

What if companies were able to communicate—in clear financial terms—the total value they create for society? While still very much in a nascent stage, such attempts at total impact valuation are being piloted by more than a dozen major companies across an array of sectors and geographies. A new report finds significant promise in these approaches, but a range of challenges remain to be tackled. Above all, standards for definitions and methodologies are needed to facilitate meaningful comparison.

China’s new Environmental Protection Tax Law (EPT Law) came into effect on January 1. It replaces the old Pollutant Discharge Fees System. Taxation could increase, as more headroom for localities allows to set higher tax rates. Some leveling of the playing field is possible, as non-compliance and tax evasion are addressed. Supply chain costs may be impacted.

Increasing recognition of the impact of environmental, social and governance (ESG) risks and opportunities on portfolio value is driving institutional investors engagement with companies on ESG.

Earlier this year, The Conference Board and Mission Measurement announced a new partnership to benchmark social outcomes data. Using Mission Measurement’s Impact Genome Project® (IGP), the two organizations will collect and analyze data on the social outcomes of corporations’ charitable contributions. Companies are now invited to participate in the IGP and to share their impact measurement data.