A recent survey conducted by ESG and EHS solutions provider, EcoOnline, reveals that a significant majority of large U.S. companies are now prioritizing sustainability reporting, with 68% having established dedicated budgets for this purpose. This trend underscores the growing recognition of sustainability as a critical driver of corporate value, independent of regulatory pressures.
The survey, which gathered insights from 95 C-suite executives, Vice Presidents, and Directors at companies with annual revenues exceeding $500 million, also highlighted the preparedness of these companies for emerging climate-related disclosure regulations, particularly those in California.
Preparedness for California’s Regulatory Requirements
The focus of the EcoOnline survey was on companies’ readiness for California’s new legislative requirements under SB 253 and SB 261. These laws mandate large businesses operating in the state to report on Scope 1, 2, and 3 greenhouse gas (GHG) emissions, as well as climate-related financial risks. The survey found that companies are actively mobilizing resources to meet these new regulatory demands.
An impressive 93% of respondents indicated that they have allocated dedicated budgets for sustainability reporting and compliance activities. This includes the 68% who have earmarked specific funds for sustainability reporting, covering expenses such as staff recruitment, technology investments, and the development of processes for collecting, reporting, and analyzing GHG emissions and other sustainability metrics.
Growing Investment in Sustainability
The survey also revealed that companies are not just meeting regulatory requirements but are also planning to increase their investment in sustainability efforts. Nearly all respondents expressed intentions to boost spending on sustainability and compliance reporting in the near future.
Specifically, 30% plan to increase their budgets within the next 12 months, 55% within the next 2-3 years, and 14% in three or more years. Only a negligible 1% reported no plans to increase their spending. The commitment to advancing sustainability is further evidenced by 76% of respondents who are either planning to implement or are exploring dedicated software solutions for specific sustainability applications.
Approaches to Scope 3 Emissions Reporting
The survey delved into how companies are approaching the challenge of reporting Scope 3, or value chain, GHG emissions. It found that 37% of companies are requesting their suppliers to self-report sustainability data.
Additionally, 80% are providing templates and guidelines to suppliers and partners to facilitate this reporting process. A smaller, yet significant, 13% of companies are deploying software solutions aimed at enhancing data collection and reporting accuracy for Scope 3 emissions.
Sustainability as a Strategic Imperative
One of the most noteworthy findings from the EcoOnline survey is that companies are committed to advancing their sustainability initiatives regardless of regulatory requirements.
All respondents indicated that they would continue to develop their sustainability programs even without the new laws. The anticipated benefits of these initiatives are substantial, with 74% of respondents expecting a positive impact on revenue growth and 95% foreseeing an enhancement in brand value due to their sustainability efforts.
Leadership and Accountability in Sustainability
The survey also highlighted the increasing involvement of corporate leadership in sustainability efforts. Forty percent of respondents reported that their board or CEO is now accountable for or oversees their company’s sustainability strategies and compliance.
Another 55% indicated that responsibility has been assigned to a senior executive or a Vice President-level leader within a dedicated sustainability department or the finance function.
This level of engagement at the highest levels of management reflects the strategic importance that companies are placing on sustainability as a core element of their long-term success.
