Sustainability-related inquiries from investors and shareholders are part of the new trends, according to a group of surveyed executives.
Ernst & Young LLP and GreenBiz Group conducted a survey in late 2012 of executives and other sustainability-minded thought leaders, asking the group what growing corporate sustainability trends they are seeing this year. After analyzing 282 responses from representatives of 17 different industry sectors, a list of six top sustainability trends was created.
- The “tone from the top” is key to heightened awareness and preparedness for sustainability risks.
- Governments and multilateral institutions aren’t playing a key role in corporate sustainability agendas.
- Sustainability concerns now include increased risk and proximity of natural resource shortages.
- Corporate risk response is not well-paired to the scale of sustainability challenges.
- Integrated reporting is slow to take hold.
- Inquiries from investors and shareholders are on the rise.
Of these six trends, I’m most intrigued by the fact that investors and shareholders are asking more sustainability-related questions than they have in the past. While top-down goals are a good sign of sustainability-minded leadership, demand from stakeholders can lead businesses to adopt sustainability goals and programs at a more rapid pace.
Proposals that focus on social and environmental issues now make up 40 percent of total shareholder proposals. There isn't just an increase in environmental-focused proposals, there is now more support for them. In 2011, an average of 21 percent of investors voted positively on a social or environmental proposal, up from only 10 percent in 2005. Obviously there is still a lot of room for improvement but now that stakeholders are seeing the business case for sustainability, we are likely to see more environmental-based shareholder-submitted proposals.
More than two-thirds (69 percent) of the shareholder-submitted proposals that executives see are focused on efforts to reduce energy consumption. This is followed by greenhouse gas emissions reductions with 64 percent and publishing a sustainability report with 51 percent.
The fact that more than half of shareholder proposals request a published sustainability report is a bit shocking.In this day and age, consumers are demanding transparency and so it would behoove businesses to prioritize a publicly available sustainability report.
Find out more about shareholder demand and other the other trends by downloading the report: 2013 six growing trends in corporate sustainability(PDF).
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