The rise of sustainability reporting in the corporate world

Dec. 2, 2013 by Sean Kilcarr in Trucks at Work

A  Vide variety of companies are embracing sustainability as an overarching concept in order to be “greener” yet cut costs at the same time.

That’s being backed up by a new finding from the 22 year-old Grant Thornton International Business Report, a global survey of 3,300 businesses in 44 countries conducted quarterly that discerned nearly one-third of them now issue corporate social responsibility (CSR) and sustainability information, either in their financial reports or in separate reports.

Ed Nusbaum (seen at left), CEO of Grant Thornton Global, noted that the number of businesses reporting CSR and sustainability is now 31%, up from 25% two years earlier, with such reporting at its highest level in India (69%), Vietnam (64%), the Netherlands (64%) the Philippines (60%) and Mexico (52%). Conversely, Estonia (6%), Poland (12%), New Zealand (16%) Finland (18%) and Australia (19%) are countries with the lowest amounts of businesses reporting.

Still, he thinks more and more companies will choose to report CSR and sustainability issues, and also choose to integrate such information into their financial report.

“Businesses are seeing the value in ‘connecting the dots’ between environmental, social, human resource, governance and financial performance, which will deliver more meaningful information to its stakeholders,” Nusbaum explained.

Overall, Grant Thornton’s poll found 57% of businesses believe CSR and sustainability should be integrated into financial reports, up from 44% two years earlier. Support is strongest in India (89%), the Philippines (86%), Peru (84%) and Brazil (77%). Support proved weakest in Estonia (18%), Sweden (19%), Latvia (26%), Lithuania (37%) and Japan (38%), according to the firm.

The survey also found that, within the next five years, an additional 12% of global firms think they will probably report CSR and sustainability, with another 14% thinking it’s “possible” they will do so. The countries with the greatest interest going forward are Mexico (73%), Turkey (71%), Peru (69%), Brazil (66%) and the Philippines (61%), while only a small percentage of businesses in Sweden (2%), Hong Kong (6%), Italy (9%), Norway and Germany (12%) plan to engage in such CSR and sustainability documentation.

Companies that also produce such “sustainability” information on an annual basis are also attempting to gain some competitive leverage through it, too.

Take United Parcel Service for instance: Scott Wicker (above at right), Big Brown’s chief sustainability officer, noted recently that his company views sustainability reporting as a valuable tool for customers, investors and other stakeholders to evaluate the performance and commitment to truly sustainable business practices.

[Wicker also made some interesting comments about how logistics and sustainability can often be two sides of the same coin back when UPS issued its 2011 sustainability report, which you can view below.]

For instance, UPS laid out how its “sustainable” practices helped cut costs during 2012:

·         Using advanced route-planning technology, UPS avoided driving 85 million miles, saving 8.4 million gallons of fuel and 83,000 metric tonnes of CO2 emissions.

·         The expanding deployment of telematics technology eliminated more than 98 million minutes of engine idling time, saving 653,000 gallons of fuel.

·         UPS achieved a net reduction in U.S. domestic energy use at its facilities.

·         UPS earned the highest Carbon Disclosure Project score among all U.S. companies and tied with three others for the top score in the world.

·         In 2011, overall emissions declined 3.5% even though package volume grew by 1.8%.  

Technology plays a big role in UPS’s sustainability initiatives and one good example is the company’s new ORION route optimization software launched this year; an acronym that stands for “On-Road Integrated Optimization and Navigation."

UPS expects the rollout of ORION to optimize 10,000 of its delivery routes by the end of the year, reduce miles driven and reinforce UPS's sustainability efforts – reducing fuel consumption by 1.5 million gallons of fuel and cutting CO2 emissions by more than 14,000 metric tonnes. Indeed, Wicker noted that a reduction of just one mile each day per driver over the course of a year saves the company up to $50 million annually.

"The development and deployment of ORION is one of the strongest examples of our commitment to continual investments in operational and customer technologies to deliver significant operational benefits, taking advanced mapping and route optimization to new levels," said Dave Barnes, UPS’s senior vice president and chief information officer. "These benefits range from cost savings to positive environmental impacts and enable our company to raise the bar even higher on efficiency and customer service."

Barnes added that U.S. deployment of ORION to nearly all 55,000 of UPS’s routes is planned to be completed in 2017, with global deployments of the system planned for the future.

I’ll close this post with some interesting comments on sustainability as a guiding principle of business by Ernesto Sirolli, an Italian who got his start doing aid work in Africa in the 1970s; an experience that formed is view of what “sustainable economic development” really means and how entrepreneurs are critical to that vision.

Think about the mention he makes of the panel of experts gathered in 1860 who unanimously believed New York City would cease to exist in 100 years due to its “unsustainable” form of transportation: the horse. Of course, human ingenuity – in the form of the good old internal combustion engine – significantly changed that predicted outcome.

Something to keep in mind as sustainability strategies become ever larger components of the modern business world – especially where trucking is concerned.