Duke Energy released its sustainability report for 2019, right illustration. The Duke Energy report details its plans to reduce carbon, then go carbon-free. There’s more than environmental material in the report, though. Those additions reflect the evolution of these kinds of reports that have appeared under various labels – sustainability, environmental, citizenship, stewardship.
By the way, this blog can give you enough reading material for an entire weekend. Just follow the links.
It is annual report and sustainability report season. Most companies issue some sort of sustainability or citizenship reports now. These reports have changed, and for the better. Over the last few decades there has been a positive public push for transparency, hard-core metrics, and expansion of sustainability goals. Definitions of sustainability have evolved.
Companies with a Carolina presence have some interesting approaches in their sustainability reports. Take a look at the Dominion report page, left. The company takes advantage of web technology to offer a “build your own” report option.
Cree is a Triangle-based company that has been a pioneer in LED lights, and now more. They have a sustainability approach you can read about on pages 8-10 in their report that charts the importance of various sustainability issues for their business and stakeholders.
Here’s how Cree explains the process [graph, left]. “To better understand which environmental, social, and economic topics are material to Cree, we engage with our internal and external stakeholders. Our internal stakeholders involved in our materiality assessment included employees of different departments within Cree. For our external stakeholder analysis, Cree reached out to suppliers, distributors, contract manufacturers, customers, investors, and trade associations. … The results of the materiality assessment help us to better prioritize our areas of focus. The material topics shown in the top right-hand corner of the materiality matrix are reported on in greater detail.”
It wasn’t that long ago that companies issued “citizenship reports” that could be perceived as light on financial and technical progress and heavier on feel-good items. The move to transparency and solid metrics that align with business is a good change, useful beyond the general public, for potential investors, for instance.
Take a look, below, at the sustainability topics that are reported by Trane, located in Davidson, NC. Trane is an innovator in climate solutions for buildings, homes, and transportation. You may have a Trane HVAC unit in your home or business. Trane gets into sustainability issues that relate directly to its business and long-term success.
The more stakeholders get clear, accountable, and relevant information, the more they will expect. That’s fine. It is an ongoing pressure to successfully mesh best practices in governance, stewardship, and performance so everyone benefits.
These sustainability reports show a move that is gaining traction in Corporate America. “A critical element to sustaining a positive reputation is thoroughly understanding and anticipating potential negative stakeholder impact from the company’s business.” That is from Barie Carmichael, co-author of Columbia University Press’ Reset: Business and Society in the New Social Landscape, and a Batten Fellow at The University of Virginia’s Darden Graduate Business School.
Examples: The more business a delivery service does, the greater potential for a large carbon footprint from its trucks. Or, a soft drink manufacturer’s largest need is water, but agriculture needs it, too, especially in poorer countries. Or, more to the point of ECC, the more power a utility makes, the more emissions it could emit. All of these are real issues that have been addressed by big companies.
“Every business is hardwired with the potential for problems. These inherent negatives are elements inherent to a company’s business model that have the potential for negative impact on stakeholders. The more successful the business, the more the inherent negatives are multiplied,” says Barie.
ECC sees sustainability reports of the most analytical firms doing something important: They match the inherent negatives of their business models with analytical and accountable solutions. The result is progress for all stakeholders. That’s especially important for companies involved in producing our energy and products that use energy.