• Register
Return to: Home > News > Regulation > Companies aware of sustainability but failing to plan: E&Y

Companies aware of sustainability but failing to plan: E&Y

Ernst & Young US reports that companies are recognising the links between sustainability and risk management but are failing to make sustainability issues a priority in their corporate agenda.

In a survey of sustainability leaders conducted in late 2012, the firm found shareholders and executives are becoming more involved, although there is not enough alignment of risk response with the scale of sustainability issues.

The report highlighted six growing trends in corporate sustainability:

First, 'tone from the top' is important for sustainability awareness or preparedness, with CEO and Board engagement critical; 36% of companies reporting total alignment with financial sustainability reporting had the full engagement, with 80% saying it was embedded in strategic planning, and 70% including such issues in their mission statement.

Secondly, it found consumers are a big influence in the advancement of sustainability, with 61% of companies citing them as a driver, as opposed to governments and multilateral institutions, which were not seen as key.

Thirdly, was a heightened awareness of natural resource shortages, with 51% of respondents expecting their company's core objectives to be affected by shortages in the next three to five years. Water was the biggest worry, with 76% seeing it as the top cause for concern.

Fourth, while awareness appears high, corporate risk response is badly matched to the scale of the challenges, with only 30% of companies having run scenario analyses, and 36% saying they had no plans to do so.

The fifth trend was E&Y said, a slow uptake in integrated reporting despite 43% saying it would be "extremely" or "very" helpful for involving the chief financial officer or the finance team in sustainability initiatives and validating non-financial information reporting.

Finally, the report found the number of investor and shareholder inquiries are rising, with half of respondents having received an increase in sustainability-related inquiries during 2012, and more investors voting on proxy proposals.

E&Y global climate change and sustainability services leader Steve Starbuck said executives across America were focusing more on "the risks and opportunities around sustainability", however they still need to engage in scenario planning, "which means company awareness has not translated into the necessary preparedness that would minimize risk and maximize opportunities for their organisation."


Related link

Ernst & Young US

Top Content

    ARGA team, assemble!

    The new top team has been named that will see in root-and-branch reform at the Financial Reporting Council (FRC) as it transforms into the Audit, Reporting and Governance Authority (ARGA). Will the new duo be as dynamic as some are hoping? Robin Amlôt reports.

    read more

    FASB: a quest for simpler standards

    FASB chair Russell Golden addressed the IMA 2019 Annual Conference and Expo at the Sheraton San Diego Hotel and Marina, California, on 18 June. IMA immediate former chair-emeritus Alex Eng acted as moderator. Joe Pickard reports.

    read more

    The future of audit, and how to get there

    Two recent reports peer into the future of the audit profession. One analyses what an audit should offer, while the other looks at how the audit process will be carried out. Robin Amlôt takes a closer look at both.

    read more

    EFAA elects new president, focuses on digital future

    EFAA’s new president, Salvador Marin, outlined his key priorities for the next two years at the organisation’s 2019 annual general meeting, while outgoing president Bodo Richardt offered advice. Robin Amlôt reports.

    read more

    CORONAVIRUS TIMELINE: REACTIONS FROM THE ACCOUNTANCY PROFESSION

    As the Coronavirus (COVID-19) continues to spread across the world, the International Accounting Bulletin and The Accountant will be collating all the latest news and updates from the profession on the pandemic’s impact.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.