It’s common knowledge that investors, analysts and other stakeholders view certain non-financial information as increasingly important indicators of a company’s long-term value. This information tends to be grouped into three categories—social, governance and environmental (including sustainability). Stakeholder attention is often evidenced by proxy proposals, inquiries from institutional investors, questions during earnings calls and investor conferences and, ultimately, by the company’s market value.
Voluntary reporting of sustainability initiatives and performance has increased significantly in recent years. This report by the Investor Responsibility Research Institute and Sustainability Investments Institute states that almost all S&P 500 companies already include some type of sustainability disclosure in their public reports, which suggests that sustainability reporting is moving from cutting edge to mainstream. Although every company may not yet be ready to, or need to, add sustainability disclosures to its filings, it’s time to consider the possibility.
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