Press Releases

NEW STUDY FINDS LACK OF SOPHISTICATION IN CORPORATE SUSTAINABILITY POLICIES

Missing features and attributes leave investors in the dark

PORTLAND, Maine (August 25, 2009) — A new study from the Sustainable Enterprise Institute has found significant deficiencies in disclosed corporate sustainability policies and practices, despite the fact that many corporations have instituted policies and are making progress on sustainability. The study, "The Road Not Yet Taken: the State of U.S. Environmental Policy and Management," analyzes the policies of companies within the Russell 1000.

"We set out to explore the extent to which current corporate environmental disclosure is adequate in describing how firms perceive and manage their environmental issues. We have heard repeated concerns from investors and other company stakeholders that the depth, consistency, and overall quality of corporate environmental disclosure does not provide a sufficient factual basis for an understanding of a firm's environmental posture or performance. For their part, some corporate representatives have expressed frustration with the apparent lack of uptake and use of published environmental data and sustainability reports within the investor community. This study represents an initial step in bridging this gap by documenting the current state of environmental disclosure across all of the largest publicly traded U.S. companies using a consistent methodology" said Peter Soyka, co-author and President of Soyka & Company, LLC.

Key findings in the study include:

• Only about 60 percent of the largest U.S. publicly traded companies have any readily available documentation that could be considered an environmental, EHS, or sustainability policy. Unfortunately, most policies lack rigor and sophistication, as fewer than 28 percent have any of six key policy elements, and fewer than nine percent have any of three or more of these elements.
• Only about eight percent of these firms apparently vest oversight responsibility for ESG issues and/or for its environmental policy in its Board of Directors, and only 1 in 18 has unambiguously delegated this responsibility to a senior corporate officer (e.g., Chief Executive Officer, Chief Operating Officer).
• Of the 590 firms in the Russell 1000 with tangible environmental (or EHS or sustainability) policies, about two-thirds make clear that policy requirements apply to all employees and operations, and just over half apply uniform standards world-wide; only about one-fourth of all policies include specifics, as opposed to general principles and/or aspirations.
• About 30 percent of these companies claim to have a formal environmental management system (EMS), and about two-thirds of these are patterned after the ISO 14001 standard.
• Only about 13 percent of Russell 1000 companies have published a corporate environmental, CSR, or sustainability report, and fewer still have reported key management activities such as extent of employee training or significant performance end points like regulatory violations or fines and penalties.
• While 27 percent of Russell 1000 firms have disclosed their direct GHG emissions, only about 16 percent have a corporate climate change policy, and only 60 percent of these firms make clear that it applies to all company operations and employees. Fewer than 25 percent of the relatively few climate change/GHG emissions policies have any of several key elements of a sound policy.
• Only eleven percent of firms in the Russell 1000 have disclosed their annual energy costs, and about seven percent have disclosed their total water use and/or cost.

The study also contains a series of recommendations that the authors believe will improve the effectiveness of ongoing environmental/sustainability management efforts, and make the information disclosed to external parties more useful.

Research on corporate sustainability practices and disclosure was provided by IW Financial, whose Director of Research, Mark Bateman, co-authored the report. IW Financial collects over 1,000 discrete data points on corporate sustainability.

"Even with a decade of guidance on sustainability disclosure from the Global Reporting Initiative, it's somewhat surprising that so many companies shy away from telling their sustainability story." said Mr. Bateman.

The study is available from one of the authors upon request. Contact petersoykaandcompany.com or markbatemaniwfinancial.com for a copy of the study.

About the Sustainable Enterprise Institute
The Sustainable Enterprise Institute (SEI) is a recently formed not-for-profit organization dedicated to promoting sustainable business practices. Its mission is to promote more environmentally and financially sound practices within U.S. organizations, through greater understanding of the important factors that promote organizational resilience and long-term success and stability. SEI conducts programs and activities designed to stimulate new thinking, develop new knowledge and tools, develop human capital and strengthen organizations, and catalyze productive changes in public policy and corporate behavior.
 
For more information on the Sustainable Enterprise Institute, visit http://www.sustainableenterpriseinstitute.org.

About Soyka & Company
Soyka & Company, LLC is an environmental and sustainability management consulting firm operated by Peter Soyka. The firm provides a variety of services and products designed to illuminate and resolve the issues limiting sustainable business success, focusing particularly on the financial implications of environmental issues and their management.
 
For more information on Soyka & Company, visit http://www.soykaandcompany.com/.

About IW Financial
IW Financial is a leading provider of environmental, social, and governance (ESG) research, consulting and portfolio management solutions for asset management firms, managed accounts sponsors, institutional investors, plan sponsors, and investment advisors.
 
With its unique combination of investment industry expertise, unbiased research, and technology solutions, IW Financial helps industry professionals capitalize on growing investor demand by incorporating ESG factors into investment platforms, products, and portfolios, adding value to the money management process while strengthening client relationships.
 
For more information on IW Financial visit www.iwfinancial.com.

Dan Porter
IW Financial
(207) 773-2333 x2094
danporteriwfinancial.com

Peter A. Soyka
Soyka & Company, LLC
(571) 748-5547
petersoykaandcompany.com