But annual update from World Business Council for Sustainable Development warns governments and regulators are still not doing enough to standardised green reporting
Leading corporates are providing investors with more information than ever before on their environmental, social, and governance (ESG) performance and their progress against the UN's Sustainable Development Goals (SDGs). But the rapid expansion in environmental reporting has led to growing calls for governments and regulators to standardise and simplify disclosure regimes.
That is the over-arching conclusion from the seven edition of the Reporting Matters annual review from the World Business Council for Sustainable Development (WBCSD), which today provides an update on the sustainability reporting performance of almost 160 leading global companies across 34 countries.
The report confirms encouraging recent trends are continuing, with more top companies than ever before providing detailed information on their ESG performance.
For example, the report reveals that 88 per cent of member companies used to benchmark progress have improved their overall reporting scores since the 2015 baseline year 2015, while 38 per cent have improved their materiality score.
Moreover, 95 per cent of the reviewed reports acknowledge the SDGs in some way, while 86 per cent prioritise specific SDGs and present some evidence of companies' alignment with and contribution to the goals.
Equally, the comparability of reports appears to be improving with 87 per cent of reviewed reports referencing the Global Reporting Initiative (GRI) and just over three quarters claiming to be in accordance with the body's global reporting standards.
Crucially, there are also encouraging signs that enhanced ESG reporting is leading to more ambitious targets being set and enhanced governance measures being introduced to ensure progress is sustained.
For example, over a third of the companies with ESG data published on Bloomberg Terminals now link sustainability performance and executive remuneration.
Peter Bakker, CEO and President, WBCSD, said the field of ESG reporting was maturing fast. "Our research shows that the range of ESG reporting frameworks, standards, requirements and voluntary initiatives is continuing to expand, making the reporting landscape complex and challenging for our members," he said in a statement. "We hope the underlying research and clear call to action to simplify and align the corporate reporting landscape we present in this report will provide a cornerstone for transforming the financial system to reward the most sustainable companies and allow their solutions to achieve the scale that society needs."
His comments were echoed by Ashleigh Gay, director of sustainability strategy at consultancy Radley Yeldar (RY), which developed the report in partnership with WBCSD.
"Sustainability is finally having its moment," she said. "From consumer activism to mainstream investor interest, companies are under pressure to respond... As we transition into a new era of sustainability post 2020, sustainability reporting will only become more important. When done well, it presents a huge opportunity for companies to engage a wide range of audiences, tell their unique story and show their progress towards a more sustainable world."
The report comes just days after Bank of England Governor Mark Carney reiterated previous warnings that if companies fail to improve climate risk disclosures they could expect governments and regulators to introduce mandatory reporting rules.
Separately a report from the Aldersgate Group of businesses last week warned that delivering a successful transition to a net zero emission economy by 2050 will be all but impossible without improved and mandatory climate disclosure practices.
Business Secretary Alok Sharma also calls for 'global green recovery' as top government figures offer further signs the green economy could be set to benefit in economic stimulus plans
Party calls for green jobs blitz, as it launches month-long consultation that seeks views from businesses, industry groups, unions, workers, and campaigners on specific measures that can be taken to kick start a green recovery.
Plus all the top green business news from around the world this week
Engine marker pledges to boost low-carbon technology R&D and reach net zero across its operations by the end of the decade, as it announces plans to cut 3,000 jobs across the UK amid coronavirus crisis.