Driving ESG Reporting Progress through Dialogue

As the demand for insight into a company’s ESG performance increases, companies are struggling to keep up with the flood of research requests. In a recent survey of its members, the National Association for Environmental Management (NAEM) found that some companies spend up to two full-time equivalent (FTE) responding to external information requests.

This challenge is especially prevalent among publicly-held U.S. corporations, where the task primarily falls on the environmental, health and safety (EHS) manager. Often times, it is unclear who the requesting entities are, how the questions are relevant to their analysis and who the audience for this information is. Survey fatigue, coupled with the lack of transparency about  environment, social and governance (ESG) research methods has led some business leaders to question the benefits of participation.

To address these questions for its members, NAEM launched its ‘Green Metrics that Matter’ project in the fall of 2010, with a survey of the Association’s 75 leadership companies. The questionnaire was designed to reveal how companies track metrics internally and which key performance indicators EHS and sustainability leaders report to the C-Suite. A coinciding survey also was sent to 25 key ESG firms to request specific information about their analysis, their products and their primary customers.

 In May 2011 NAEM held a stakeholder dialogue to discuss the challenges of ESG research from the perspective of business leaders, research analysts and the investment community. While prior stakeholder dialogues have generated valuable recommendations for improving the reporting process, the NAEM event was perhaps the first to initiate a dialogue on behalf of corporate EHS and sustainability managers; these are the business leaders responsible for EHS data tracking, EHS program management and external sustainability reporting. 

The “Driving ESG Progress Through Dialogue” report summarizes insights from the conference and outlines key recommendations for improving the ESG research process going forward. For more information about the “Measuring Corporate Sustainability” event and to download a copy of the report, please visit: http://www.naem.org/?CP_SUS_meas_sust