“For securities filings, you’re going to have disclosure controls and procedures because the SEC basically requires you to. So for these non-legally required disclosures you’re making in the ESG area, there should be documentation,” he said. “If somebody asks, ‘How did you come up with this disclosure?’ there is going to be a record you can look at. If we say, ‘we reduced our water usage by 10 percent last year,’ where did that come from?”
Shifting Stakeholder Expectations Transparency and Accountability
So to what extent are shareholders and stakeholders holding companies accountable for living up to their assertion of good ESG and sustainable disclosure?
According to Boerner, there are a number of things shareholders should be looking for in companies that are indicative of reliable long-term value.
“The investor is looking…for the usual advantages. How to minimize risk and maximize return. Better understand the risk and opportunity equation, he said. “We have seen evidence of a greater return from investing in a company that pays serious or close attention to their operations, cleans up, and has a good handle on their energy use and sources, especially when measured per production unit or per employee.”
Boerner said that it’s more than an overall question of numbers, of, “How many watts did we use this time last year.” Rather, it’s a company being serious about energy usage per product output, and looking at ways to manage or reduce what is being measured.
“And then stakeholders begin to look elsewhere across the enterprise, asking, ‘Do they recycle internally?’ ‘Do they have a lot of waste or use waste, and recycle it into the product process?’ ‘What is the life cycle?’” Boerner asked. “Sometimes they are harder to quantify, but over the long term – and investing should be the long-term – you should be looking at companies with demonstrated best practices. The leaders in that space generally outpace peers and competition and become recognized sustainability leaders.”