Increased Corporate Reporting Good For Nonprofits

More than four of five (82 percent) of S&P 500 companies published corporate sustainability reports during 2016, representing a four-fold increase from 2011. The 82-percent figure marks a highpoint during the six years that the Governance & Accountability Institute, based in New York City, has tracked such reporting. The trend upward could open more and more opportunities for nonprofits to foster relationships with corporate partners, according to Hank Boerner, chairman and co-founder of the institute.

The increased reporting started at the turn of the century when companies were in the midst of inflating figures, leading to the burst of the tech bubble, according to Boerner. Congress passed the Sarbanes-Oxley Act in 2002, aimed at corporate governance reform, but the law did not prevent the 2008 recession. During the recovery, corporate managers began taking it upon themselves to be better corporate citizens, he said, reporting on corporate governance, polices, and environmental management.

In 2011, the first year the institute began tracking S&P 500 companies for sustainability reporting, 20 percent reported data. That leapt to 53 percent in 2012 and 72 percent in 2013, beginning a steady climb in 2014 (75 percent), 2015 (81 percent), and 2016 (82 percent).

This trend most directly effects nonprofits in that the more companies that prioritize and report sustainability, the more potential opportunities nonprofits have to partner with corporations with similar missions, Boerner said. Examples might include a bank with an affordable housing nonprofit, a technology company and an organization focused on science, technology, engineering, and mathematics (STEM) education, and a food retailer with a soup kitchen.

Boerner recommended nonprofit managers look over corporations’ sustainability reports for opportunities to align missions. “It’s about the survival and thriving of not-for-profits in today’s society with government cutting back — slashing,” he said. “Somebody has to pick up the slack and the business community knows it’s them.”

Boerner doesn’t foresee a scenario, absent government mandate, in which 100 percent of the S&P 500 companies conduct sustainability reports. Rather, he sees the percentage that do ticking up bit by bit, year to year. Somewhat relatedly, however, Boerner noted that major corporations such as Johnson & Johnson have come to demand compliance with corporate citizenship policies down their supply chains. Such a development could open the door for savvy nonprofits to engage with slightly smaller companies to aid their mission, according to Boerner.