One of the most strking findings of the annual assessment of corporate sustainability practices by DNV Two Tomorrows
Published 11-06-12
Submitted by DNV Two Tomorrows
Whilst an increasing number of organisations are painting a legitimate picture of sustainability success, the reality is that on a global scale they are far from reaching solutions. The 2012 Tomorrow’s Value Research from DNV Two Tomorrows reveals that, in the drive for greater transparency, companies risk becoming too introspective and losing sight of the bigger sustainability picture.
Now in its ninth year, the Tomorrow’s Value Research (TVR) provides a unique insight into the sustainability practices of the world’s largest companies. DNV Two Tomorrows, the leading international sustainability consultancy, assessed the 25 largest companies by revenue in each of three different regions: Asia/Australia, Europe, Middle East and Africa, and the Americas, plus the 19 Dow Jones Sustainability Index (DJSI) 2011 supersector leaders.
Dr. Todd Cort, director of the 2012 TVR, notes a disturbing trend revealed by this new research:
“Large companies around the world are providing greater and greater transparency in the form of metrics, targets and descriptions of their management approaches. This is evident in the continual rise in GRI reporters and in the improved scores year on year in our research. However, it is evident that companies are losing sight of the big picture: are we successfully addressing the global challenges that we all face? Such challenges require collaborative solutions.
“We have seen through the research that the vast majority of metrics, targets and management approaches look away from the impact or success of collaborative efforts to tackle sustainability challenges. Instead, these indicators focus increasingly on the sustainability aspects within the company’s sphere of control. Companies are becoming too introspective in their reports. ”
Dr. Cort continues, “The result is corporate sustainability reports that paint legitimate pictures of success in sustainability but a global reality where we are far from achieving solutions.
“In 2000, sustainability came dangerously close to green-washing. Reporting standards since have persuaded reporting companies to disclose management approaches, but the pendulum has now swung too far. In 2012, sustainability reporting has become an almost obligatory box-ticking exercise demanded by stakeholders.
“Sustainability reporting should instead be an opportunity to drive continuous improvement toward the big challenges that we face as a society.”
The 2012 Tomorrow’s Value Research highlights companies such as HP, Panasonic and Siemens who demonstrate best practice in their sustainability programmes. However, the success of these companies also demonstrates the difficulty that most have in moving up the ‘ladder’ to leadership. Only 10 of the 19 DJSI super-sector leaders scored over our leadership threshold (70%) and less than a third of the largest companies crossed this threshold.
The 2012 Tomorrow’s Value Research also highlights sector and regional strengths. Europe continues to drive best practice in sustainability with an average score of 69%, but the greatest improvements in reporting have occurred in large Asian companies, highlighted by strong reports in Korea and Australia, as well as relatively new reporters in China and India.
Not surprisingly, technology companies have taken the lead in applying innovation to environmental and social challenges. These companies are also leading the way in integrating broad stakeholder feedback into their innovation processes to drive new product development and more efficient manufacturing.
But the most robust management and governance structures remain in the traditional ‘high risk’ industries such as oil and gas and heavy manufacturing. Leaders in this sector are building on decades of operating in challenging environments to roll out best practices in risk management that integrate specific mechanisms for stakeholder feedback.
KEY FACTS FROM 2012 TOMORROW’S VALUE RESEARCH
Tomorrow’s Value Research 2012 standout companies
Stand-out companies by region | HP – Leads the way in innovation on the strength of HP Labs and leading-edge life-cycle analysis for products that pulls in broad stakeholder feedback and addresses both environmental and social impacts/benefits of products from sourcing to end-of-life.
Panasonic – Demonstrates one of the strongest management approaches to sustainability including strategic target setting in most areas, robust controls to manage performance against material issues and clear mechanisms for stakeholders to feed into the management processes.
Siemens – Discloses a highly inclusive governance system for sustainability issues. Siemens describes mechanisms to identify stakeholders, gather feedback and weigh that feedback against business priorities in a systematic manner at each level of the company.
Stockland – An overall strong performer, this DJSI super-sector leader goes out of its way to describe the mechanisms by which stakeholders can engage with the company, influence decisions and drive product improvements.
Westpac Banking – Shows one of the more integrated business and sustainability strategies included integrated metrics and wide range of business products with environmental and social credentials. Asia/Australia: Hyundai Engineering Ltd, Panasonic EMEA: BMW, EON, Siemens The Americas: Ford, GE, HP, Petrobas |
Top region | EMEA |
Top sector | Technology |
Most innovative sector | Technology |
Sectors with best stakeholder engagement practice | Construction and Materials; Technology |
Sector with best governance systems | Banking; Oil and Gas |
Percentage of companies above the TVR leadership threshold (70%) | 28% |
Percentage of DJSI super-sector leaders above the TVR leadership threshold (70%) | 53% |
Range of scores | 7% - 87% |
Regional average scores largest companies | Asia/Australia: 49% EMEA: 61% The Americas: 51% |
Average score for the largest companies | 54% |
Average score for the DJSI super-sector leaders | 69% |
www.twotomorrows.com/tomorrowsvalue
Notes to editors
The 2012 Tomorrow’s Value Research (TVR) is a unique, value-driven assessment of corporate sustainability practices. The methodology is based on several fundamental principles:
This year, we assessed the 25 largest companies by revenue in each of three different regions: Asia/Australia, EMEA and the Americas. Company size was determined based on the Fortune Global 500. We also included the 19 2011 DJSI Supersector Leaders. Only one company (Philips) was both one of the 25 largest companies in its region and a DJSI Supersector Leader.
As part of our shift away from a Rating and toward value-added research, we have not generated a league table this year, nor attributed scores to specific companies.
DNV Two Tomorrows is an international corporate sustainability agency, delivering deep insight, strategic advice and pragmatic support to companies, enabling them to create long-term value by doing business sustainably.
Highly experienced consultants help clients with the full range of sustainability corporate responsibility issues, with services including strategy, training, reporting and assurance. Two Tomorrows has world-leading expertise and many years of hard-won knowledge in issues as diverse as responsible sourcing, producer responsibility, carbon strategy, water management, biodiversity, human rights as well as bribery and corruption.
DNV is a global provider of services for managing risk, with safeguarding life, property and the environment as its purpose.
DNV Two Tomorrows is an international corporate sustainability agency, delivering deep insight, strategic advice and pragmatic support to companies, enabling them to create long-term value by doing business sustainably.
Highly experienced consultants help clients with the full range of sustainability corporate responsibility issues, with services including strategy, training, reporting and assurance. Two Tomorrows has world-leading expertise and many years of hard-won knowledge in issues as diverse as responsible sourcing, producer responsibility, carbon strategy, water management, biodiversity, human rights as well as bribery and corruption.
DNV is a global provider of services for managing risk, with safeguarding life, property and the environment as its purpose. DNV acquired the Two Tomorrows Group in May 2012.
www.twotomorrows.com / www.dnv.com
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