Six growing trends in corporate sustainability

Investor and shareholder inquires on the rise

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As demands for disclosure on environmental and social impacts increase so does the number of surveys, questionnaires and queries to companies.

They come from many and diverse directions: institutional investors, customers, media, industry analysts, communities, regulatory and non-regulatory government bodies (at the local, national and international levels), activist groups and various others.

Each seems to want more or different data then the others, or may pose the same questions in slightly different ways. The resulting tsunami has overwhelmed many companies’ ability to cope.

We've learned that some large companies respond to more than 300 customer surveys each year.

Half of our survey respondents reported that they are receiving an increase in the number of sustainability-related inquiries from investors and shareholders over the past 12 months.

That underscores growing interest, particularly by institutional investors, many of which now view corporate sustainability issues as material to shareholder value.

The growth of queries also mirrors the growth of shareholder proposals on social and environmental issues, which now account for 40% of all shareholder proposals. Support for those proposals is growing, too: The average proposal received 21% of investors’ votes in 2011, up from 10% in 2005, reflecting a relatively high level of interest and support.

All shareholder inquiries?

At the top of the list of shareholder proposals are those focusing on companies’ efforts to reduce energy consumption, an acknowledgment that energy efficiency not only increases competitiveness, but also reduces risks associated with volatile energy prices, as well as carbon taxes or other regulatory schemes.

Second highest on the list are proposals addressing greenhouse gas emissions reductions or adoption of quantitative greenhouse gas goals.

Climate and energy will likely remain front and center for shareholders. At the institutional level, investors are getting increasingly organized around these topics.

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