Verdantix Says That The Future Of Sustainability Disclosures Will Be Defined By Four Different Scenarios At A Geographic Level
New York. September 15, 2015. The practice of publicly disclosing corporate data relating to sustainability issues has boomed over the last 20 years. But attempts to standardize disclosures at a global level are doomed to fail as corporate marketing strategies, national regulations and societal expectations will shape regional responses to sustainability. This is the primary conclusion of a new report, ‘The Future Of Sustainability Disclosures’ from independent research firm Verdantix based on a survey of 260 heads of sustainability and interviews with a panel of 25 experts.
“When it comes to sustainability, firms want the freedom to disclose what they want, how they want, when they want” commented Yaowen Ma, Verdantix Industry Analyst and author of the report. “There is a drip feed of regulations from governments and quasi-regulations from stock exchanges requiring issue-specific disclosures. But today, sustainability is 95% a communications issue and 5% a compliance issue. We found no indication that this will change significantly in the next 10 years.”
Key findings from the Verdantix report include the following:
- Use of the GRI guidelines for sustainability reporting has boomed to 4,490 reports in 2014 representing a 24% compound annual growth rate from 2009 to 2014
- On a worldwide basis, 82% of firms with revenues above $1bn produce a sustainability report, up from 66% in 2012
- There are more than 350 sustainability ratings on the market and over 2,555 corporate-specific metrics
- Signatories of the UN Principles for Responsible Investment (UNPRI) manage $59 trillion in assets, up from $18 trillion in 2009
- In the next 10 years, there is no prospect of detailed regulations mandating what sustainability disclosures firms must make
- The growing geographic spread of firms making sustainability disclosures will further increase the diversity of standards, ratings and rankings in use
“Disclosing sustainability information – whether in reports, ratings or rankings – is a growing trend around the world” commented David Metcalfe, Verdantix CEO. “We developed four different scenarios for the future evolution of sustainability disclosures applicable at regional levels. The US scenario will see sustainability disclosures develop in response to investor requirements. In Europe, issue-specific regulations will drive sustainability disclosures in the direction of a quantitative metrics scenario. The Indian scenario is one of message-driven social responsibility marketing. The scenario that is not going to happen is standardized sustainability disclosures enforced in a way similar to financial reporting. There is no evidence that scenario will play out in any region of the world.”
Find out more here.