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American companies are shut out in a global contest that identifies the eight that are best at sustainability reporting.
Josh Hyatt, CFO Magazine
July 15, 2008
Let's hope the United States doesn't perform this badly in all international competitions, or the Beijing Olympics will be about as compelling to watch as a "Bassmaster Classic" rerun.
Earlier this year, the Amsterdam-based Global Reporting Initiative, a nonprofit group that issues widely used guidelines for sustainability reporting, launched a worldwide challenge. It asked readers of the reports, which supply detailed information about companies' efforts to address environmental and social issues, to choose the world's best reports. More than 1,700 readers in 70 countries scored 800 reports based on relevance, completeness, and other criteria. When the winners in eight different categories were announced there was not an American company among them (clothing retailer The Gap did earn an honorable mention).
America's poor showing was foreshadowed by a similar contest in which CorporateRegister.com, an online database of corporate responsibility reports (which are virtually synonymous with sustainability reports) asked its members to rank 300 entrants. Nine category-conquerors emerged, but only two came from the United States: Coca-Cola Enterprises and Green Mountain Coffee Roasters (which won in two categories). "American companies have adopted a different attitude toward corporate responsibility," says Paul Hohnen, one of GRI's founding directors. "They seem to think that it's fine for the rest of the world to do it, but that it doesn't apply to them." In a regulatory sense, it doesn't. European firms are required to issue sustainability reports; in the United States such efforts are voluntary.
Even so, GRI estimates that about 2,500 U.S. companies release sustainability reports. How is it possible, then, that the U.S. contingent fared so poorly? Perhaps it's a matter of emphasis. "CFOs and CEOs have tended to put their attention toward something that will have a direct impact on shareholder interest, so they focus on the Dow Jones Sustainability Index," says Bryan Smith, a co-author (with Peter Senge and others) of The Necessary Revolution. "There are marketing advantages to it in terms of attracting socially responsible investors who are loyal and long-term." There may be an even simpler explanation. "A lot of people voting came from India, Brazil, and Latin America," notes GRI spokesman Scott McAusland. "The readers were rewarding companies they knew well." In other words, blame the judges — just like sore losers in the Olympics do.
|And the Award Goes To…|
Companies praised for the quality of theirsustainability reports hail from all corners of the globe — well, almost all.
|Gas Natural SDG|
|ABN Amro India|
|Fundación Empredimientos Rurales Los Grobo|