Record Growth in Sustainability Reporting Among U.S. Companies
Governance & Accountability Institute, Inc. (G&A) has released new insights into sustainability reports from U.S. public companies. This research highlights trends from 2023, especially in firms listed on the S&P 500 and Russell 1000 indices. The data indicates a significant increase in sustainability reporting, as U.S. regulations begin to align more with European standards for Environmental, Social, and Governance (ESG) disclosures.
Insights from the 2024 Sustainability Reporting Research
G&A’s 2024 Sustainability Reporting in Focus represents the 13th edition of their annual study on how major U.S. companies handle and disclose sustainability information. The report thoroughly examines the tools and standards used in their reporting, incorporating frameworks like GRI, SASB, and TCFD. For the first time ever, there's a specific focus on trends in sector-specific reporting across all 11 sectors outlined by the Global Industry Classification Standard (GICS). This adds an important layer to their analysis.
Key Findings from the Research
The research uncovers crucial data points that highlight the significant progress made in sustainability reporting this year. Here are some key takeaways:
- An impressive 93% of Russell 1000 companies issued a sustainability report in 2023, an increase from 90% in 2022.
- Mid-cap companies within the Russell 1000 saw the most substantial growth in reporting, with 87% publishing reports—up from 82% the year before.
- In the larger companies of the S&P 500, 98.6% reported on sustainability issues in 2023, a slight rise from 98.2% in the previous year.
- SASB was the most commonly applied sustainability reporting standard, with 81% of Russell 1000 reporters adhering to its guidelines in 2023, an increase from 78% in the previous year.
- Reports aligned with GRI maintained a steady presence, with a small uptick from 54% to 55% across the Russell 1000. Interestingly, smaller companies in this group improved their alignment from 40% to 42%.
- Alignment with TCFD recommendations also saw a significant increase, reaching 60% of Russell 1000 reporters in 2023—a substantial rise from 50% in 2022, and a mere 4% in 2019.
Quotes from G&A Leadership
Louis Coppola, Executive Vice President and Co-Founder of G&A, underscored that this is a pivotal moment for companies as they transition toward mandatory sustainability reporting. He commented, "The shift to mandatory reporting presents an unprecedented opportunity to bolster investor confidence, stakeholder trust, and operational resilience. Now is the time to 'grab the bull by the horns' and embrace the future with clear-eyed determination. Sustainability is at the core of what allows a business to thrive in today’s economy."
Hank Boerner, Chairman and Chief Strategist at G&A, expressed his optimism regarding the breadth and depth of sustainability reporting being undertaken by public companies. He remarked, "The G&A team is heartened by the increased volume and comprehensiveness of sustainability reporting by U.S. companies, especially since it's still voluntary. When ESG disclosures become mandatory—which we anticipate will happen soon—companies that are already reporting will be ahead in meeting these new requirements."
About Governance & Accountability Institute
Founded in 2006 and headquartered in New York City, G&A is dedicated to helping organizations and investors develop strong strategies around sustainability and ESG topics. G&A’s comprehensive process for sustainability reporting is designed to assist organizations in achieving industry leadership in sustainability while maximizing their efforts’ returns. Over the years, G&A has built a substantial database comprised of corporate sustainability reporting data, based on the thorough analysis of thousands of ESG reports, aimed at enhancing strategy and improving reporting practices.
Frequently Asked Questions
What is the focus of G&A's 2024 research?
The research focuses on trends in sustainability reporting among U.S. public companies, especially in the S&P 500 and Russell 1000, showcasing the growing volume of reports as regulations evolve.
What were the key findings concerning Russell 1000 companies?
Key findings reveal that 93% of Russell 1000 companies published sustainability reports in 2023, indicating a rising trend in corporate accountability and transparency.
Which reporting standards saw increased usage?
The research from G&A identified that SASB became the most widely used standard, while alignment with TCFD recommendations also experienced significant growth, reflecting a strong response to stakeholder demands for transparency.
What does the increase in reporting imply for companies?
The rise in reporting indicates that companies are proactively preparing for potential future regulations mandating ESG disclosures, demonstrating a commitment to sustainability.
How long has G&A been conducting sustainability research?
G&A has been releasing annual sustainability research since 2011, systematically analyzing trends within corporate sustainability reporting.
