By: Tiffany Richmond
Today climate change, sustainability and the related governance of these areas are high on the agenda of many global companies’ boards and management teams. Leading organizations recognize the risks and opportunities associated with this these topics considering their direct impact on costs, reputation and regulatory requirements. Along with this focus on sustainability organizations are seeing the value of regular public disclosure of their sustainability initiatives. Research has demonstrated that companies that disclose the results of their sustainability initiatives, particularly those programs focused on energy efficiency and environmental reduction actions, have achieved a higher performance in terms of bottom-line results from their sustainability programs.
While there are many avenues for public disclosure increasingly companies are reporting their results on the various public financial indexes that have emerged across the globe, such as the Dow Jones Sustainability Indexes (DJSI) and the Financial Times and the London Stock Exchange4Good Indexes (FTSE 4Good Indexes). The use of a public index allows the company to post its results within a trusted and respected source and compare their performance to their peers an “apples to apples” comparison.
In addition to these indexes organizations voluntarily report their sustainability performance and progress through regional or global programs, such as the Carbon Disclosure Project (CDP).
So what exactly is corporate sustainability and why are sustainability indexes gaining popularity? Are organizations disclosing their data to showcase their commitment to reduce their carbon footprint? Is it to increase the valuation of the company to investors? Or is it to show the investor community they have a sustainable business model?
Tiffany Richmond has over five years of experience as a marketing professional and is responsible for online marketing strategies at Energy Advantage Inc.