Contrary To Popular Opinion, The US Is Toppling Europe In Sustainability

There were plenty of European accents and an I-just-got-back-from-Davos buzz as over 200 sustainability bigwigs descended on the New York Stock Exchange today to mark the official launch of a US ‘focal point’ office by the Global Reporting Initiative (GRI).

Ernst Ligteringen, GRI’s chief executive, laid out the main theme: In 2009 just over 12 per cent of GRI-based reports came from US companies; 45 per cent were from European companies. Only one in eight ESG reports in the US are assured compared to one in two in Europe.

‘Why so slow?’ Ligteringen pondered. ‘Why is America not in the lead? Why is it letting the rest of the world lead in sustainability reporting?’

So goes the common perception. I recently began researching an IR magazine article based on the same notion – that Europe was way ahead in sustainability reporting. I wanted to find out why, and what the US and Asia had to do to catch up. Instead I found evidence that the US was quickly catching up. In fact, it may already have grabbed the lead.

My article was posted online a few weeks ago and it’s the cover story in IR magazine’s February issue. The print version has a chart from Michael Muyot’s CRD Analytics showing a transformation in sustainability reporting between 2009 and 2010: the number of reports from Asia, Japan, Europe, and the US jumped by over 250 per cent to a total of 2,608; the US slice of that total went from 22 per cent to 39 per cent while Europe dropped from 51 per cent to 35 per cent; Asia’s proportion doubled from 5 per cent to 10 per cent.

Trucost’s Cary Krosinsky, who worked on Newsweek’s well-regarded Green Rankings, told me the revolution is hitting second and third-tier US companies but smaller European companies aren’t really catching on. So the top half of Newsweek’s Global 100 – a ranking of the world’s 100 biggest companies – looks Europe-heavy and US-light. But if Krosinsky gets to do a Global 500, as he hopes to, US companies would very likely dominate the top half.

The upshot is that among the world’s biggest companies, Europe is the leader still in sustainability reporting. But expand the picture to include several hundred slightly less big companies, and the US is building a comfortable lead.

Considering GRI’s audience this morning included a lot of America’s green elite – sustainability executives from the likes of PepsiCo, Alcoa, American Electric Power and State Street – Ligteringen’s condemnation of American ESG reporting could have felt harsh. Then again, as GRI reporters, those companies may have been tsk-tsking as well.

The corporates in today’s panel discussion were no laggards. Steve Leffin, director of global sustainability at UPS, said sustainability was in his company’s DNA. He joked – or maybe it’s true – that UPS chose brown because it takes less water and soap to wash uniforms and vehicles if their colour hides dirt. 

Susan Arnot Heaney from Avon Products revealed that ‘corporate responsibility’ was one of Avon’s founding principles – literally. Remarkably, that was in 1886. Avon came to sustainability reporting initially through philanthropy, or its ‘bank of good will’, as Arnot Heaney called it.

The panel concluded with a passionate speech by Mindy Lubber of Ceres, the organisation originally formed in response to the Exxon Valdez oil spill. US-based Ceres created GRI and still shepherds it – another argument against the idea that the US is a follower in sustainability, not a leader.

To have a ‘focal point’ for Amsterdam-headquartered GRI set up in in the US – for now a desk in the Conference Board’s office – is overdue. There are already other focal point offices in Brazil, Australia, India and China.

Mike Wallace, who spoke following this morning’s panel discussion, took charge of GRI’s new outpost in October. This affable ESG expert, formerly an independent consultant and an adviser to Trucost, moved from California to Amsterdam in 2009 as GRI’s director of sustainability reporting framework. Now based in New York, he is providing US companies that want to follow GRI’s framework with a much handier point of contact. 

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