Sustainability Reporting: Earth in the Balance Sheet

Sustainability reports offer plenty of eye candy, but can they actually help managers make better decisions?

Scott Leibs is a deputy editor of CFO.

The Performance Gap
Percentage of companies that believe they should take certain actions regarding sustainability, versus percentage that actually do.
Activity Should do Actually do
Fully embed sustainability issues in strategy and operations 72% 50%
Have board discuss and act on these issues 69 45
Foster collaborations or multistakeholder partnerships to address goals 56 43
Fully embed issues in subsidiaries’ strategies and operations 66 38
Embed sustainability issues in IR strategy and analyst relations 51 31
Embed these issues in global supply-chain management 59% 27%
Source: McKinsey & Co. survey of 391 CEOs whose companies participate in the UN Global Compact
A Global Movement
The percentage of companies producing
sustainability reports increased sharply between 2002 and 2005, except in the U.S.
Country 2002 2005*
Japan 72% 81%
UK 49 71
France 21 43
Canada 19 42
Finland 32 42
Netherlands 26 38
Germany 32 37
U.S. 36 37
Italy 12 33
Spain 11% 32%
*For 2005, includes both companies that produced separate sustainability reports and those that included sustainability data in annual reports; 2002 figures represent companies producing separate sustainability reports only.
Source: KPMG

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