Despite the increasing politicization of business and public life, more organizations in the United States are displaying great stewardship about ESG disclosure. Still, current data indicates an increased level of stakeholder demands on companies on both the diversity of the workforce and climate change disclosures from conservative politicians. This trend demonstrates a rising focus both from investors and regulators on ESG matters, resulting from changes in global culture and business environment expectations.
Increasing Use of Web-Based Corporate Reporting
ESG reports are on the rise in Corporate America and, diversity data has increased from 5.3% in 2019 to 82.6% by September 2021. Sustainability reporting has also increased; currently 85% of large-cap firms from the U.S. offer details on greenhouse emission in contrast to 54% in the same year, 2019. Current Professor of Accounting at Columbia Business School, Dr. Shiva Rajagopal will opine that ESG challenges are business problems, a position that means these reports cannot be mere political circus.
Corporations are reacting to numerous forces that include changes to the rules governing sustainability reporting as exemplified by the CSRD introduced in the EU. A lot of organizations have already stated goals related to climate change, pay gaps, or diversity in their workforce that will not be easy to change. Ken Rivlin, a partner of the law firm A&O Shearman comments on the notion that the establishment of corporate policy relying on existing political trends is unworkable.
Managing Politics and Sociology
Although certain big-name players such as Lowe’s and Ford have scaled back on diversity reporting initiatives, there appears to be sustained activity across the board. In 2024, over 1,400 organizations responded to the survey conducted by the Human Rights Campaign. HRC President Kelley Robinson stated this is due to the pressure from the workforce and consumers for companies to be more open and accepting.
