What’s Trending in 2023 Sustainability/ESG Reports

For the last nine years, we’ve taken a bi-annual stock of corporate reporting trends. This helps us understand where the reporting landscape is headed amid regulatory, economic and societal shifts, and the data we uncover helps better inform our clients on how sustainability communications is shifting.

Our 2022 Trends in Corporate Reports white paper uncovered the emergence and rise of topic-based reports, what frameworks are being used, how progress was being reported and who was talking about Net Zero across the Fortune 200. In this update, with the stakes being quite different amid the upcoming SEC mandate and anti-ESG bills on the rise, we decided to focus on evaluating ESG reporting elements that we thought would have been most dramatically impacted by these changing stakes. In May 2023, we reviewed 25 sample reports from this years’s Fortune 200, here’s what we found:

Despite the political whiplash, more companies are adopting the title of “Environmental, Social, and Governance” or “ESG” Report.

From the year prior, this increase outpaces the titles of “Corporate Social Responsibility” or “CSR” Reports, with no change in how the titling of “Sustainability” Reports is used. According to Google, the trend line is similar: the term “environmental, social, and corporate governance” is at its peak interest over the last year, with “corporate social responsibility” following close behind. We can assume this rise mimics a cultural domino effect. The more we see and hear a phrase and the more the phrase (in this case, “environmental, social, and corporate governance”) is tied to the growing needs of how companies report on their goals, we can assume the more we’ll continue to see a rise in this specific titling, despite the potentially negative connotations.

Companies are opting to report more on their sustainability efforts year over year.

There was an increase in companies using the TCFD (Taskforce on Climate Related Financial Disclosures), GRI (Global Reporting Initiative), UN Global Compact, SBTi (Science Based Targets Initiative) and CDP to report their efforts for the 2021 to 2022 reporting cycle. This isn’t dissimilar to what we’ve seen in prior years, except this year the greatest increase was seen in companies reporting with the UN Global Compact, followed by SBTi, whereas in prior years, TCDF led the charge. The increased adoption of these frameworks can be tied to expectations that companies have long and short-term plans of how they will achieve their ESG milestones. With this framework adoption we’re also seeing a regulatory tightening, all while investors are demanding more transparency from companies. While there has been a lack of standardized reporting for ESG to date, the utilization of more frameworks allows for more data to be shared, and thus, more visibility across a company’s functions.

We saw an increase in Net Zero commitments and companies reporting progress towards their own goals.

This makes sense when understanding the point above, coupled with investors increasingly wanting to understand whether companies are taking active steps towards their ESG goals. For many, the increase in documenting progress all boils down to being able to answer one question: “does this company’s actions make the world a better place?” A “better place” means different things to various stakeholders, and companies are seeing the need to be able to accommodate and manage stakeholder expectations.

More companies are opting to host information on their websites.

This decision can be seen as one that makes finding specific information easier for stakeholders. These dedicated hubs allow for physical and digital reports to become shorter, while these dedicated pages allow the space to host robust, updatable information that was once only available in the reports — downloadable pieces, such as investor summary sheets, data-only sheets or overviews on specific topics are all common examples we’re seeing.  Per a recent Harvard Law School research study, Summary ESG data tables continue to be an effective way to satisfy investor inquiries, especially if data is downloadable in Microsoft Excel. Plan accordingly!

Our Takeaway

Despite no mandates (yet) for reporting in the U.S., it’s clear that companies still have a vested interest in accurately capturing data and reporting on progress. Similarly, though we have seen an increase in anti-ESG rhetoric, the need to address what your company is doing to manage risk, court investors, engage and enroll stakeholders, remains as important as ever. While you may have already published your report for this year, it’s never too early to start thinking about your next report. Use these trends to help you strategize for the year ahead.

Get guidance: How Ideas On Purpose can help

If you find yourself struggling to see how your company can turn trends into actions, consider engaging an expert. Check out the award-winning and stakeholder-pleasing sustainability reports and communications IOP has created — and email us to get in touch if you need help with yours.

A note on our methodology

This year we chose a sample set of 25 companies from the Fortune 200 due to its proxy for leading companies in the U.S., influence of the companies and lack of bias in this selection. The sample set is representative of the multitude of industries represented by the Fortune 200. We examined the 2022 Reports available on companies websites from May 19, 2023 to May 23 2023.

To evaluate Goals and Progress, we included companies that reported progress toward goals they set for themselves, rather than just the SDGs or other outside metrics. If there was a clear table or several goals as headings for a section, companies were given a “Yes,” as in they were reporting progress toward goals they set for themselves.

To evaluate Net Zero, companies that used the language of net zero and commitment specifically got a check in this box. Those that used other language such as “aspiring toward,” “setting a goal to achieve,” or set a carbon neutral goal were not considered.

To evaluate a company’s Web Presence, we included companies that went meaningfully beyond simply providing links to their report by integrating substantial and relevant ESG content on their website.

The 25 companies included in our sample set: Alphabet, AmerisourceBergen, Apple, AT&T, Bank of America, Cardinal Health, Chevron, Citi, CVS Health, Dell, Ford Motor, General Motors, Home Depot, Intel, JPMorgan Chase, Kroger, Meta, Microsoft, Pfizer, Target, Verizon Communications, Walgreens Boots Alliance, Walmart, Walk Disney, Wells Fargo

Cover photo: Bud Helisson on Unsplash