Europe Leads in “Triple Bottom Line” Reporting
According to the survey, more large Western European companies provide data in each category of the triple bottom line than those in the U.S.:
Economic: 98 percent in Western Europe;
93 percent for the U.S.
Social: 78 percent in Europe; 65 percent, U.S.
Environmental: 78 percent in Europe; 52 percent, U.S.
“The Triple Bottom Line got an earlier start in Europe, and is further evolved there than in the U.S.,” said Sunny Misser, Global and U.S Leader of PricewaterhouseCoopers’ Sustainability practice. “With the current breakdown of confidence in financial reporting, large companies are facing increasing demands and expectations from stakeholders and are being held more accountable for their performance and actions. The Triple Bottom Line approach is a proactive step in providing shareholders with increased transparency and a broader framework for decision making.”
Misser said some executives might experience challenges with the Triple Bottom Line reporting process, as tools and metrics to measure social and environmental performance are still in the developmental phase.
“Triple Bottom Line reporting as it currently stands, has its limitations, but it’s a great way for companies to disclose meaningful non-financial information that impacts their financial results. This is the time for companies, especially in the U.S., to seize the opportunity,” he said.
Western Europe-based companies report extensive capabilities for economic reporting, though somewhat less than their American peers: U.S. Europe
. Excellent-to-good tools for measuring economic performance 76% 74%
. Ability to demonstrate positive performance over time 80% 74%
. Use of concrete metrics to show sustainable improvements 72% 61%
“Economic performance is not limited to financial information,” said Misser. “It spans wages and benefits, productivity, job creation, outsourcing expenditures, R&D investments, and investments in training and other forms of human capital. For those embracing or considering the Triple Bottom Line, this area is the best-documented and reported.”
Reporting on social considerations is much less frequent, with Western European and U.S.-based companies reporting at a comparable level: U.S. Europe
. Excellent-to-good tools for measuring social performance 39% 37%
. Ability to demonstrate positive performance over time 50% 47%
. Use of concrete metrics to show sustainable improvements 39% 37%
“Social issues typically include workplace health and safety, employee retention, labor and human rights, corporate philanthropy, diversity of the workforce, as well as wages and working conditions,” said Misser. “In this area, the standards are evolving, and the tools and metrics vary by geography and industry.”
Environmental reporting has been underway for a while and is at a more sophisticated stage relative to social reporting. European companies are clearly in the lead: U.S. Europe
. Excellent-to-good tools for measuring environmental performance 35% 42%
. Ability to demonstrate positive performance over time 40% 51%
. Use of concrete metrics to show sustainable improvements 31% 37%
“Environmental issues include the impact of production processes, products and services on air, water, land, biodiversity, and human health. Manufacturing, oil and energy companies, which have clear ramifications on natural resources use, are leaders in providing this information, while service companies can demonstrate a clear advantage by reporting in this area,” said Misser.
PricewaterhouseCoopers’ “Management Barometer” is an established quarterly survey in the U.S. The Western European findings reported here are from the second wave of a pilot test. Countries represented include the U.K., Germany, the Netherlands, Switzerland, Belgium, France, Ireland, Luxembourg, Norway, Sweden, Italy, Austria, Denmark, and Spain. These surveys are developed and compiled with assistance from the opinion and economic research firm of BSI Global Research, Inc.