Sustainability as a Regulatory Requirement Reply

Sustainability developed initially as a voluntary activity.  Some companies have even referred to their sustainability or corporate responsibility efforts as, “doing well by doing good!” however, there are some changes in the works that would move at least parts of sustainability into a company’s regulatory compliance program.  Some of your customers may be demanding that you have a formal sustainability program.  Walmart is a good example of a company who has an initiative that many retail customers are following.  It consists of a number of required sustainability elements. Walmart enforces these requirements by training and sending out a cadre of auditors to make sure that the requirements are being adhered to. 

The United States Government has also notified 600,000 government contractors that they have to adhere to the greenhouse gas emission reduction requirements articulated in the Presidential Executive Order #13514. If these contractors do not begin making progress against these established goals, they could lose their contracts.

If your firm is publicly traded, or you work for a customer that is publicly traded, there is growing pressure from investors to have sustainability programs implemented throughout a supply chain.  Investors are organizing in an effort to share information and keep pressure on their targets.  One such group, Investor Network on Climate Risk, has supported a large number of stockholder proxies at annual meetings this year.  These groups have websites with best practices and toolkits to help investors be more effective at demanding sustainability throughout a supply chain.

The Securities and Exchange Commission and other watchdog government groups are making sure that companies are properly disclosing their risks associated with climate change and other environmental, social and economic issues.  Investor groups have been relentless in making sure that their concerns are addressed in the disclosure process, such as Form 10K reports.

Corporate Responsibility Magazine reported on the “100 Worst Corporate Citizens.” As transparency is considered the holy grail of sustainability, they were looking for companies that had little to no sustainability information on their websites.  There are also demands for accountability – setting goals and targets followed by reporting on the progress being made to attain these goals.  It is amazing just how much information on a company’s sustainability is being posted on the Internet these days. This makes it easier to conduct valid benchmarking unless, of course, the data is not accurate.

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