Catherine Benson Wahlén writes on the SDG Knowledge Hub website of the International Institute for Sustainable Development (IISD) about the findings from the seventh annual review from the World Business Council for Sustainable Development’s (WBCSD) of corporate environmental, social and governance (ESG) reporting and disclosure.
WBCSD Finds Corporate Reports Focus Most on SDGs 8, 12, 13
The World Business Council for Sustainable Development’s (WBCSD) seventh annual review of corporate environmental, social and governance (ESG) reporting and disclosure finds 88% of member companies have improved their overall scores since 2015. The authors call for simpler reporting standards to make reporting more effective in communicating businesses’ contributions to the SDGs.
The publication titled, ‘Navigating the landscape: a path forward for sustainability reporting,’ analyzes reporting among 159 companies from 34 countries and 19 supersectors. The report finds that a convergence of government regulation, investor scrutiny and public pressure has led to “an explosion of information requests and reporting approaches” to meet stakeholder needs, creating a “significant burden for reporters.” Within this context, the report recommends simplifying and aligning the corporate reporting landscape.
The report finds that 95% of reviewed reports recognize the SDGs in some way. Although 47% of reports include the SDGs in leadership statements, only 20% of these feature detailed discussions on the SDGs. About 20% of reports provide target-level information, and the remaining reports focus on Goal-level information. Only 6% of reports align key performance indicators (KPIs) to the SDGs, and 15% align corporate targets with the SDGs.
The majority of reports (86%) reference specific SDGs. Reports typically reference six to ten SDGs (35% of reports). The most commonly referenced SDGs are:
- SDG 13 (climate action), mentioned in 87% of reports;
- SDG 12 (responsible consumption and production, 81%); and
- SDG 8 (decent work and economic growth, 32%).
Conversely, SDG 14 (life below water) is the least referenced SDG, with only 32% of reports mentioning the Goal, followed by SDG 1 (no poverty, 34%), SDG 16 (peace, justice and strong institutions, 38%) and SDG 10 (reduced inequalities, 41%).
The report states that 2019 has seen “enhanced scrutiny” of private sector efforts to deliver the SDGs. For example, the World Benchmarking Alliance (WBA) plans to rank the SDG performance of 2,000 companies.
The report notes that sector-level initiatives to advance the SDGs have continued, with the publication of the Forest Sector SDG Roadmap and the Indian Cement Sector SDG Roadmap, both of which outline ambitions from these industry groups on how they can collectively maximize and realize their potential to achieve positive SDG impact. WBCSD is collaborating with IPIECA, the global oil and gas industry association for advancing environmental and social performance, on an oil and gas industry SDG Sector Roadmap.
In addition to sector-specific efforts, the report observes a “surge in ambitions” around cross-sector initiatives that aim to address systemic issues, such as the Food and Land Coalition’s (FOLU) efforts to provide affordable, healthy food for the world’s growing population, absorb more greenhouse gases (GHGs) and protect the planet’s natural resources. Other highlighted initiatives include the Business for Nature coalition, One Planet Business for Biodiversity, and the Alliance to End Plastic Waste (AEPW).
The report also showcases good practices in SDG reporting. Covestro’s report includes a section on the SDGs that addresses opportunities to make a positive contribution and avoid negative impacts. Covestro has set a target to align 80% of its research and development project spending with the SDGs. The Danone Group aligns its 2030 goals and KPIs with the SDGs in its 2018 Company Dashboard, highlights links between the SDGs and its own sustainability strategy, and elaborates on these linkages with specific pages for each SDG.
WBCSD released three addendum reports focused on specific aspects of reporting: the role of risk and governance in internal decision-making and external disclosure; the evolution of sustainability strategy and target-setting; and the future of digital reporting and emerging technologies. The report highlights an increasing trend towards digital reporting, with 23% of reports providing a digital-first experience. The number of corporate members with a PDF-first approach that also produce complementary online content increased from 44% in 2017 to 64% in 2019. [WBCSD Press Release] [Publication: Navigating the landscape: a path forward for sustainability reporting] [SDG Knowledge Hub Story on 2017 Report]