Research Wednesday: What Do Business Environmental Leaders Say in Their Reports?

Author

As Researcher Manager at BCLC I’m happy to announce the start of two new research initiatives for 2013. First, welcome to the first official edition of "Research Wednesday”! Every 2nd Wednesday of the month, the Research Wednesday column will give you the latest insights from BCLC, including our unique data analysis about positive business impact in society.

The second initiative is a whitepaper on environmental sustainability reports, available to our members in April. Reporting continues to be a hot topic, as an increasing number of companies share information about their social and environmental impact. This growth is pronounced – the Global Reporting Initiative’s database (PDF, pg. 20) has shown 17% to 20% year-on-year growth from 2007 to 2011. 

As more companies join the movement to create reports, there is considerable ambiguity about best practices. What sections do you include? Do you conduct a materiality analysis? Do you integrate your responsibility reporting with the annual report to stockholders? Environmental reporting is particularly challenging. With a bewildering zoo of terms and acronyms, and a plethora of reporting options, it can be difficult to know the best path for reporting your environmental goals and impacts. 

I don’t want to give away any punchlines while research is on-going; however, I will whet your appetite by explaining a little about our methods. First off, the report is based on an interesting analytical approach. We are scanning the sustainability reports of 45 U.S. companies found on Newsweek’s preeminent Green Rankings. Conveniently, Newsweek’s rankings provide a separate score for a company’s environmental impact, their environmental leadership, and their reporting robustness. This provides us the unique ability to separate companies according to their impact on the environment and their commitment to environmental leadership (combining their leadership and reporting score). 

Furthermore, if we divide companies into thirds on these two dimensions, we get a 3x3 table with nine possible outcomes (like the one shown here). 

 

Lower Leadership
Medium Leadership
Higher Leadership
Lower Impact

5 companies

5 companies

5 companies

Medium Impact

5 companies

5 companies

5 companies

Higher Impact

5 companies

5 companies

5 companies

 

Selecting five companies from each group, we get a sample of 45 companies neatly divided along the spectrum of impact and leadership. This allows us to ask interesting questions and find interesting commonalities. For instance, what do leaders share in common in their reports (independent of their impact on the environment)?  How does a higher impact score change your reporting style (independent of your commitment to leadership)? 

This in-depth scan of reports will provide baseline data from a robust sample of leading reporters. How do these companies structure their reports (what sections do they include)? What strategies do they employ? On what issues do they set goals?  Most importantly: what content do leaders include in their reports (i.e. what might increase your leadership score)?   

I’m excited to convey our insights to members in April.

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