From watching companies walk back climate commitments to keeping up with the latest from the Anti-ESG movement, it’s easy to lose the forest for the trees in ESG. While these trends are important, they can obscure the real progress being made in sustainability. The Governance & Accountability Institute recently published its 2024 Sustainability Reporting in Focus survey which revealed continued year-over-year progress in sustainability reporting, stating:
“The percentage of Russell 1000® companies reporting on sustainability rose to an all-time high of 93% in 2023, up from 90% in 2022. The highest growth continued to come from companies in the smallest half of the Russell 1000 by market cap (approximately $2-$4 billion in market cap). In 2023, 87% of these companies published reports, up from 82% in 2022, and more than double the 39% of companies which published reports in 2019. For the largest half of the Russell 1000 by market cap – which roughly comprises the S&P 500® and includes about 80% of large cap companies – the number of companies publishing reports approached 100% reporting, with a record high of 98.6% publishing reports in 2023.”
These numbers are encouraging and show that companies are gearing up to comply with the regulatory landscapes emerging in the EU and California. While reporting continues to increase, this says nothing of the quality of the data, which is notoriously a thorny issue for ESG professionals, especially with supply chain data. In addition, more stakeholders – including regulators – are evaluating whether/how companies use this information. As ESG reporting matures, the quality of data and how companies act on that data will face greater scrutiny from both regulators and the public.
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