U.S. firms lagging on sustainability issues, report says

U.S. publicly traded firms are making some progress on sustainability issues, however the speed and scale of those changes are insufficient, according to a new report from Ceres and Sustainalytics.

 “Incremental progress in tackling global climate change and other sustainability threats is simply not enough,” the report, called Gaining Ground, states.

The report finds that while more than two-thirds of the companies evaluated (438) have activities in place aimed at reducing greenhouse gas emissions, only 35% (212) have established time-bound targets for reducing such emissions. And although 37% of companies have implemented a renewable energy program, only 6% have quantitative targets to increase renewable energy sourcing.

Fifty-eight percent of companies (353) have supplier codes of conduct that address human rights in supply chains, and one-third (205 companies) have some activities in place to engage suppliers on sustainability performance issues.

Fifty-two percent (319 companies) are engaging investors on sustainability issues, up from 40% in 2012, when a similar survey was conducted.

“Companies with the vision and strategies for integrating sustainability principles into all facets of operations are more likely to generate long-term shareholder value than those that do not,” the report says. “In fact, investors are increasingly integrating sustainability criteria into investment decisions, and are rewarding companies who engage shareholders on sustainability issues.”

A growing number of companies are incorporating sustainability performance into executive compensation packages, the report notes: 24% of companies (147) link executive compensation to sustainability performance – up from 15% in 2012.

Ceres and Sustainalytics assessed more than 600 U.S. publicly traded companies, tracking their performance on 20 key metrics, including greenhouse gas emissions, governance, disclosure and labour standards.

“The findings of this report should inspire companies to examine their own progress and identify where they stand on the path to sustainability,” said Michael Jantzi, CEO and Founder of Sustainalytics. “This is about more than how companies stack up against their peers – it’s about how innovation is driving performance from the corporate boardroom throughout the entire supply chain.”