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An Ernst & Young LLP and Boston College Center for Corporate Citizenship Paper Return on Responsibility Why do firms publish sustainability reports? Publishing a sustainability report leads to business benefits. Challenges. Data seems to be the biggest inhibitor plaguing the execution of sustainability reporting. Both the availability and accuracy of data hinder the process, according to the survey's findings. Internal buy-in is also a challenge. Depending on the size of the organization, the bandwidth to conduct proper reporting can be limited. Assurance. The majority of respondents—more than two-thirds— say they follow GRI or GRI-referenced framework in their reports. And on the rise is assurance. It is an increasingly important way to Reputation: Employee execute risk management, and its presence is predicted to grow Engagement: More than 40% of %Trend Fivereporting. % with the need for alignment across all sustainability firms that publish More than 30% The survey found that 35 percent of respondents have some of sustainability firms that publish level of assurance conducted on their sustainability reports, and reports say they reports say they of those reporting assurance, 55 percent have their full reports improve firm increase employee 1 loyalty. assured and 45 reputation. percent have some indicators assured. 1 30 40 Trend Five The Value of Sustainability Reporting An Ernst & Young LLP and Boston College Center for Corporate Citizenship Paper Why do firms publish sustainability reports? Publishing a sustainability report leads to business benefits. 40 % Reputation: More than 40% of firms that publish sustainability reports say they improve firm reputation.1 30 Employee Engagement: %Trend Five More than 30% of firms that publish reports say they increase employee loyalty.1 Trend Five 0.6 Firms ranked highly for sustainability have Kaplan-Zingales Index scores that are 0.6 lower than firms not ranked highly (indicates fewer capital constraints).2 88 % Improved Access to Capital: Firms ranked highly for sustainability have Kaplan-Zingales Index scores that are 0.6 lower than firms not ranked highly (indicates fewer capital constraints).2 Increased Efficiency / Decreased Waste: 88% of firms that publish sustainability reports say reporting makes their organization's decisionmaking more efficient.3 Publishing a sustainability report prepares for outside pressures. $3.74 Trillion 0.6 Improved Access to Capital: Investors: Approx.$3.74 trillion in assets are administered by managers who evaluate for sustainability.4 20 Stock Exchanges: Stock exchanges in at least 20 countries require or strongly encourage firms to provide reports.5 sustainability reports. 95% of the Global 250 issue 6 Sources 88% Increased Efficiency / Decreased Waste: 1. 2013 Boston College Center for Corporate Citizenship and Ernst & Young survey 88% of firms that publish sustainability reports say reporting makes their organization's decisionmaking more efficient.3 3. Black Sun Plc, "Understanding Transformation: Building the Business Case For Integrated Reporting," Black Sun Plc, 2012, p. 13. Publishing a sustainability report 2. B. Cheng, I. Ioannou and G. Serafeim, "Corporate Social Responsibility and Access to Finance," Social Science Research Network, 2011, p. 25. 4. Governance & Accountability Institute, 2012, p. 36. 5. The Hauser Center for Nonprofit Organizations; Initiative for Responsible Investment, "Current Corporate Social Responsibility Disclosure Efforts by National Governments and Stock Exchanges," Initiative2013 | www.thecro.com MAY/JUNE for Responsible Investment, 2012. 6. GRI, "Report or Explain: A Smart Policy Approach for Non-Financial Information Disclosure," 7 March 2013, p. 1. [Online]. Available: https://www.globalreporting.org/resourcelibrary/GRI-non-paper-Report-or-Explain.p [33]