From the Conference Board--Tentative Evidence of Greater U.S. Enterprise Sensitivity to Issues of Sustainability and Human Rights (But Still Quite a Way to Go)

(Pix © Larry Catá Backer 2015)

Recent reports from our friends at the Conference Board suggest that, especially among large transnational enterprises that may feel the effects of pressure to conform to international business and human rights  standards more strongly, U.S. enterprises are more strongly embracing these  international business and human rights standards in their formal practices and policies. Matteo Tonello and Thomas Singer, Sustainability Practices 2015: Key Findings (Conference Board 2.015)

The report strengthens the arguments put forward over the last decade by John Ruggie and those supporting a strong zone of autonomous governance spaces for business that social norm systems may have a positive effect on corporate conduct, especially in the business and human rights field (see here, here and here).  Of course, it is both to early to tell, and the relational direction of the data require more careful consideration.  Still, the evidence strongly suggests a great gap between the sustainability and human rights cultures of European and U.S. companies.  That gap is worth considering in substantially more detail.

The Conference Board Press Release, a summary of the key findings and information about the  Conference Board Sustainability Practices Dashboard follow:

Conference Board Press Release:

The debate on business compliance with human right protection standards shows some results, as US companies start to catch up with Europe on the adoption of formal policies

Access Sustainability Practices 2015 Dashboard

Download the Key Findings

A majority of large, multinational companies have a human rights policy, according to research conducted by The Conference Board in collaboration with Bloomberg and GRI. Data for 2014 show 51 percent of S&P Global 1200 companies reported having such a policy, up from 44 percent in 2013. However, there are significant geographic differences. Almost 80 percent of European companies reported such policy, compared to only 35 percent of North American companies. Despite this gap, the trend among North American companies is positive: only 23 percent of North American companies reported a human rights policy in 2013. Pressure from stakeholders is in part driving more companies to adopt human rights policies. For example, increases in human rights violations reported around the world have prompted stakeholders to place greater pressure on companies to manage social issues in their supply chains. Investors are also aware of the risks businesses face in this area, and companies that violate human rights are often targeted by activist shareholders and voting advisory firms.

Download the key findings to learn more about the current state of corporate sustainability disclosure.

Sustainability Practices and the full Corporate Intelligence portfolio are complimentary to members of The Conference Board. A fee may apply to non-members.

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The Global Awakening
Companies Respond to Climate,
Corruption, and Other Risks

More US companies are aligning sustainability disclosure with global standards through the Global Reporting Initiative (GRI) framework. Even though the overall environmental and social disclosure rate among global companies has remained essentially unchanged over the last year, reporting using the GRI framework continued its rise in the United States, and one out of three large U.S. companies now adopt those guidelines. Exceptional progress has also been made in the transparency of individual practices, such as anti-bribery and climate change.

These are some of the findings from The Conference Board Sustainability Practices Dashboard 2015, a comprehensive database and online benchmarking tool that serves as the foundation for this report. The dashboard captures the most recent disclosure of environmental and social practices by large public companies around the world and segments them by market index, geography, sector, and revenue group. Other key findings from this year’s data include the following:

Reporting Practices
• GRI reporting continues to rise among US companies, especially large multinational firms subject to international disclosure requirements.
• The overall sustainability disclosure rate (an average across all practices analyzed) grew faster among smaller companies in all regions.
• Report verification and assurance have increased slightly over last year.
Environmental Practices
• The risk climate change poses to a business is being disclosed with more prominence, especially among US companies.
• Greenhouse gas (GHG) emissions disclosure has reached unprecedented levels among
smaller companies.
• Water consumption disclosure remains low, despite growing recognition of a global water crisis.

Social Practices
• Disclosure of anti-bribery policies showed the greatest increase among the practices analyzed in response to more aggressive prosecution of corruption cases by several countries.
• Pressure from stakeholders drove significant uptake in human rights policy disclosure.
• Employee turnover increased across all sectors, especially in the United States. The increase is most likely a reflection of modest improvement in labor markets.
• Corporate charitable and community spend in the S&P Global 1200 increased 13 percent over last year. North American companies continue to replenish their giving programs after the hiatus of the economic recession.
• Sustainability continues to be absent from the executive compensation philosophy of most companies regardless of geographic location.

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The Conference Board Sustainability Practices Dashboard

The Sustainability Practices Dashboard is a web-based intelligence tool created through collaboration between The Conference Board, Bloomberg, and the Global Reporting Initiative (GRI). The dashboard captures data on 79 environmental and social practices of business corporations in the S&P Global 1200, including:

• Atmospheric emissions
• Energy, electricity, and fuel consumption
• Water consumption
• Waste reduction and sustainable packaging
• Environmental supply chain and procurement policies
• Biodiversity policies
• Labor standards
• Diversity in the workplace
• Human rights practices
• Executive compensation policies linked to ESG performance
• Health & safety policies and measures
• Charitable and political contributions

Data in the Sustainability Practices Dashboard can be segmented by three indexes (the S&P Global 1200 index , S&P 500, and Russell 1000), ten sectors, four revenue groups, and four regions. The updated dashboard expands the analysis of the previous edition and introduces year-over-year comparisons to highlight notable trends in sustainability disclosure. An overview of the methodology is available on page 20.

Sustainability Practices was inaugurated as a publication in July 2012 and became a web-based application in 2013, in response to growing demand from company directors, investors, financial analysts, and other stakeholders for comparative data in the sustainability field. With the dashboard, users can view individual sustainability practices by segments and generate customized charts. Access The Conference Board Sustainability Practices Dashboard at www.conference-board.org/sustainabilitypractices.