2Sustain

Regular readers here know that I frequently post about corporate sustainability reports and other innovative steps companies are taking to reduce their environmental impact.

However, by focusing on businesses that are leading the way, I know that I run the risk of making it seem –by extrapolation –that most companies are “getting it,” and that businesses, in general, are incorporating sustainability into their overall business plans.

Unfortunately, that’s just not true.

A newly released report from the Sustainable Enterprise Institute (SEI) reminds us that, in reality, most U.S. corporations do not have responsive, value-generating environmental and sustainability programs. Some do. But, the vast majority of companies still aren’t incorporating environmental policies into their business strategy.

In its first major published work, titled “The Road Not Yet Taken:  The State of U.S. Corporate Environmental Policy and Management,” SEI presents a detailed review of the publicly disclosed environmental policies, management structures, systems, measurement and reporting activities, and disclosures of the 1,000 largest publicly traded U.S. corporations (the companies from the Russell 1000 Index.)

The findings in this 50-page report are quite sobering.

For instance, while more than half (about 60%) of the companies in the study have an identifiable, enterprise-level environmental policy of some kind, most are lacking a number of key elements. The majority of companies don’t report specifics about GHG emissions or energy and water use in their, and only 8% have an executive-level committee with responsibility for CSR or environmental, health, and safety oversight.

Here’s a table that shows the extent to which different provisions are featured in corporate environmental policies:

Even though the data presented is discouraging, SEI is careful to conclude the report on an optimistic and encouraging note.

“We believe that companies do not grow to the size or market capitalization needed to be included in the Russell 1000 Index without possessing abundant talent across may professional disciplines, a durable business model, and a clear understanding of business management fundamentals, trends, and priorities,” the authors explain.

“For this reason, they are or should be fully capable of developing sophisticated, responsive, and value-generating environmental and sustainability programs. What will be required, however, based on the experience of those who have traveled this path, is senior management vision, commitment, and visible ongoing support, and the resources needed to design, deploy, and maintain appropriate policies, systems, work practices, and measurement and reporting mechanisms. We recognize that the associated costs of such an effort may be nontrivial, at least initially. But as with any other investment in organizational capability, funds devoted to an adroit and disciplined approach will pay big dividends. Indeed, given the relative risks and costs of the status quo, well-targeted investments in ESG capability will be time and money well-spent.”