Taking Corporate Sustainability Reporting to the Next Level
Large multinational companies are producing more information about their carbon footprints and staff diversity, but executives say the data need to be high quality and relevant to investors.
New standard-setting groups are starting to release consistent methods for reporting metrics. Next month, the International Integrated Reporting Council, one of the larger standard-setting groups, plans to release the first version of a framework to link sustainability and financial reporting data.
“Sustainability reporting…only matters to investors when there’s a number related to it,” said Friederike Edelmann, a former investor relations executive at German software company SAP AG and beauty and fragrance company Coty Inc., said at a Baruch College conference in New York on Friday.
When SAP started working to produce more sustainability data in 2007, it was fielding some 80 questionnaires a year from smaller investors, credit-rating firms, business partners and other stakeholders about its environmental, human, and social metrics, Ms. Edelmann said. Questions about how much trash it produced a year may not be that material for a software company, but SAP increased its focus on questions that were relevant to its bottom line, such as calculating employee turnover, staff diversity, and customer satisfaction, which are now in its annual report.
Original post on the Wall Street Journal.