Many corporate CEOs, foreseeing a need for investment-grade data on sustainability and corporate responsibility issues, are planning changes to their business strategies within the next three years, according to a report released Wednesday by PwC.
The report, titled “Creating Value from Corporate Responsibility,” found that more than half of the CEOs surveyed anticipated that stakeholders would require more and better information on environmental and corporate responsibility as they took such data into account in their purchasing decisions. However, existing corporate social responsibility reports often fail to meet the standards of other data reports.
Kathy Nieland, PwC's U.S. sustainable business solutions leader, said in a statement, “Investors, regulators and NGOs are holding businesses to higher standards, and company reputations and valuations are hinging on their ability to report on their efforts in a quantitative way.”
With shareholder activists seeking more and better disclosure on sustainability, getting ahead of the curve on delivering such data offers a number of advantages. Among them, according to PwC, are:
- Better assessment of risks and opportunities at all levels of the business
- Ability to allocate resources and set appropriate performance goals
- Confidence that baseline measurements are accurate
- Ability to enhance trust and promote value with key stakeholders
- Improvements in delivering information in a timely and consistent way
- Fewer errors and restatements
- Less opportunity for manipulation.
Doug Kangos, partner, PwC U.S. sustainable business solutions, said in a statement, “Companies are increasingly expected to provide investment-grade sustainability data, and basic e-mail, spreadsheet, or other do-it-yourself reporting processes won't provide the necessary discipline. Companies have a significant opportunity to improve their sustainability reporting, and investors are increasingly expecting the precision and the context that they've come to expect with financial reporting.”