March 1, 2018

Corporate ESG Goals Up 54%[1]

Data is our friend. In this case, corporate ESG data is our best friend. ESG, which stands for environmental, social, and governance, is the terminology used to describe corporate social responsibility standards.

ESG data allows investors, analysts, and customers to better understand how a company is reacting to our changing world. Are they reducing CO2 emissions? Water use? Are they keeping up with human rights policies and gender equity in the workplace?

“If [companies] can’t show that they have systems in place to manage their environmental challenges then it suggests that management may not be up to standard in other areas too.” Ingrid Dyott is the Portfolio Manager of the $2.5 billion Neuberger Berman Socially Responsive Fund, and believes ESG performance translates into financial success.

Companies are taking notice – and this is a good thing for our planet. Pivot Goals has been tracking corporate ESG goals for 6 years, in one of the largest searchable databases of its kind. The findings from 2017 show that Fortune 200 companies are stepping up their game and setting more ESG goals.

The ESG data show that Fortune 200 companies with any ESG goals has increased from 78% in 2012 to 94% in 2017.

Pivot Goals reveals even more promising up-to-date ESG findings.

Here is the percent of companies that have goals in these categories, from 2012 to 2017.

Climate – 65% to 68%

Energy – 53% to 61%

Renewables – 24% to 37%

Employees – 12% to 49%

Community – 16% to 47%

It is clear that the leading sustainability organizations are focusing on climate, energy, and renewables. But just as promising is the increase in goals that support people and communities.

In particular, these two categories have gained importance in corporate sustainability, with corporate ESG goals set going from 0% to over 15% of companies.

      Women – 0% to 24%

      Human Rights – 0% to 18%


Reporting Consistency

As sustainability reporting becomes a de facto corporate activity, the data is becoming more consistent. This means that companies are reporting year over year, and many companies have been reporting their ESG data for 5+ years.

Many corporate reports can be expensive greenwashing, but when a company reports their ESG data consistently and consecutively, their credibility improves greatly. Imagine a company “saying” they are going to reduce greenhouse gas emissions 25% by 2020. Well, if you can see their performance from 2012 to 2017 and it looks on track, they are taking their commitment seriously. But if a company were to throw out a set of bold numbers and not back them up, analysts and investors can see that the past will likely predict the future.

ESG reporting databases are becoming increasingly important in helping us aggregate and track this data over time.  

Science-Based Targets

ESG goals are becoming more real, too. In this case, “real” means based in science. Thanks to Science Based Targets, a collaborative initiative of NGOs around the world, companies can now set corporate ESG goals that are in line with the level of decarbonization required to keep global temperature increase below 2 degrees Celsius compared to pre- industrial temperatures (as described in the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, IPCC AR5).

In 2018, 422 companies are taking science-based climate action and 113 companies have approved science-based targets.

The data provided by Pivot Goals shows that the number of goals in the sustainability database that are “science-based” targets have increased from 10% in 2014 to 19% in 2017. Given that the Science Based Targets initiative is relatively new, this is a clear indication that real sustainability goals are taking hold.


Why Sustainability Goals?

Science-based targets, and sustainability reporting in general, are helping businesses take bold new leaps forward. Many companies adopt ambitious sustainability goals to help them:

      Increase innovation

      Reduce regulatory uncertainty

      Strengthen investor confidence and credibility

      Improve profitability and competitiveness

But another reason that is often not mentioned is the ability to attract a talented workforce. This case study from Dell reveals that Millennials care deeply about playing a role in the sustainability of the planet.

John Pfleuger, the Principal Environmental Strategist at Dell, says, “It also helps us attract and retain the right staff. Millennials in particular care how responsible a company is and will use that as a basis of a decision around who to work for.”


Dow Chemical’s Leading Blueprint

Dow Chemical is taking it one step further:

      “We will lead in developing societal blueprints that integrate public policy solutions, science and technology, and value chain              innovation to facilitate the transition to a sustainable planet and society."

Their bold blueprint was launched in 2015 and continues to report its ESG data. The initiative set forth a plan to:

      Launch 6 Circular Economy initiatives

      Deliver sustainable chemistry innovations

      Engage in 100 significant dialogues across the public and private sector

      Establish 10 new collaborations

      Positively impact 1 billion people

      Obtain 400MW from renewables

With leading players like Dow, ESG data is not only helping us track corporate performance, it’s setting the bar higher for every company on the planet.




[1] From 2012 to 2017. 1300 –> 2000

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