Report: FTSE100 must go beyond compliance with sustainability reporting performance
The gap between corporations leading the way on sustainable business practices and those that are simply complying with legislation for their CSR programmes is "as large as ever", according to new research into the sustainability reporting performance of the UK's top 100 listed companies.
The 2016 Sustainability Reporting Performance report, released today (29 September) by consultancy firm Carbon Clear, ranks each FTSE100 firm on its carbon measurement and reporting; strategy and targets; emissions reduction; engagement with stakeholders; and innovative approach to sustainability reporting.
Telecoms company BT Group is the “leader of the pack”, scoring a total of 89%. Retailer Marks and Spencer (M&S) follows close behind BT with a score of 88%, while Unilever completes the top three performers with a score of 86%. BT is praised for “setting the standard for sustainability reporting”; M&S for its “consistent and holistic approach to delivering meaningful reductions”; and Unilever for being an “all-round innovator”.
Whilst Carbon Clear welcomes these companies’ comprehensive approach to carbon and sustainability reporting, it also highlights a “disappointing” situation, where too many other firms are still lagging behind when it comes to sustainable business practices.
The average score for the full FTSE 100 list is just 44%, with 57 of the 100 companies rated at 50% or below.
“The hard work and dedication of companies such as BT, M&S and Unilever have towards developing a more sustainable business model is fantastic,” said Carbon Clear chief executive Mark Chadwick. “These 'leaders of the pack' are setting the agenda for business sustainability proving that such an approach is aligned to long-term commercial value.
"But the gap between those pushing the boundaries of best practice and those simply complying with legislation remains as large as ever. Given the risks of ignoring climate change – whether it’s losing business to a competitor who mirrors customer values in sustainability, or infrastructure being disrupted due to severe weather - this doesn't make sense."
"This is especially the case when its often simple steps that see the quickest returns, whilst paving the way for a longer term strategy."
However, there are some signs of positive change from across the FTSE100 index. In the report, Carbon Clear identifies a significant uptake in renewable energy initiatives across the 100 companies within the past 12 months, with increase of 9% of companies (up to 64) using or buying renewable energy compared with 2015.
One in 10 of the FTSE100 are now signed up to the Climate Group’s RE100 pledge for companies to source 100% of energy from renewables - including a recent addition from drinks firm Diageo, which is ranked 10th in Carbon Clear’s report.
Meanwhile, the report goes onto note that five companies turned to relatively ambitious Science Based Targets (SBTs) within the past year – joining BT, the sole adopter in the FTSE100 last year. These companies, Carbon Clear says, are more likely to meet or even exceed their reduction targets than those companies with more generic targets. Four out of the six companies that have adopted SBTs have exceeded their goals and the other two are on course to meet them.
The report concludes that the ambitious global climate targets established within the Paris Agreement at COP21 at the end of last year have perhaps reinvigorated climate awareness amongst the FTSE100 firms, by “raising the bar for climate action”.
Commenting on the report, environment director at Business in the Community (BITC) Gudrun Cartwright said: “Business must be at the centre of reducing carbon emissions if our economy is to achieve the kind of smart growth needed to ensure long term prosperity for business and society.
“As we approach the first anniversary of the historic [Paris] Agreement, we urge businesses from the FTSE 100, and indeed beyond, to make sustainability a central part of their strategy. We hope this report will both inspire businesses of all sizes to look at how they can set ambitious sustainability targets and challenge businesses to understand their potential to do more.”