ESG. Net zero. Sustainability goals. Scope 1 emissions. Scope 3 emissions.
You'll find these terms somewhere in nearly every public company's reports — but not in a standardized way. That makes it harder to hold the firms accountable for meeting international benchmarks.
ESG stands for environment, social and governance. Investors, employees and other stakeholders over the last decade increasingly pushed companies to improve goals in these areas and be transparent about their progress.
Stoking even more disclosure are plans to require standardize reporting on some measures by the European Union and likely the U.S. Securities and Exchange Commission.
Among the 30 largest Minnesota public companies, all but one have an ESG report or website. The exception, New Brighton-based APi Group, is a relatively new public company and plans to release its first sustainability report in the third quarter.
Nationally, 96% of S&P 500 companies issue updates in either their annual reports or specific ESG takeouts.
The reporting has increased over time — as has its use by investors — despite a wave of pushback from conservative political interests, according to an analysis of more than 3,500 corporate reports published in the fall by a trio of professors from Harvard, Northwestern and Rice universities.
"ESG has just become such a part of the cultural language of business that I don't really remember a time when there were no firms doing this," said Ethan Rouen, one of the authors of the analysis and an assistant accounting and management professor at Harvard, in an article on the university's business school site.