The corporate reporting of sustainability data – call it ESG, or environmental, social, and governance data – has come a long way. Only 20% of Fortune 500 companies reported ESG data in 2011. By 2016, according to the Governance and Accountability Institute, only 20% failed to report. More than 10,500 organizations have created almost 40,000 separate sustainability reports, according to the Global Reporting Initiative. The Bloomberg terminal now includes more than 700 different ESG disclosures from nearly 12,000 companies.
This information flood has produced interesting market insights, but it is also becoming clear that the value of ESG reporting does not reside entirely in the output of data. The very process of gathering this data and integrating it into management practices can create operational and economic benefits beyond those determined by investor valuation. ESG-related efficiency and performance improvements can impact intangible brand value, enterprise risk management, and product and service innovation.
Read the full article by Evan Harvey (Director of Corporate Responsibility for Nasdaq)