Introduction
A lot has happened in the sustainability world since we published our State of 2023 U.S. Sustainability Reports one year ago. The long-awaited U.S. Securities and Exchange Commission’s climate disclosure rule was legally challenged and halted within a few months of it being finalized. Ironically, California finalized its own climate disclosure rules that go beyond the requirements of the SEC’s rule. Outside of the U.S., dozens of countries have announced that they will adopt rules mandating disclosure to the International Sustainability Standards Board (ISSB) sustainability framework. And the first European Union’s Corporate Sustainability Reporting Directive (CSRD) disclosures are due next year for many companies. Of course, all these regulatory initiatives come amidst the ongoing “anti-ESG” campaign led by politicians and activist groups.
These two mega trends – increasing requirements from regulators for more ESG disclosure and increasing pressure to abandon ESG altogether – have forced many companies to rethink their existing ESG strategies. How are companies managing the risks of these conflicting mega trends? How are companies adjusting their ESG communications? What impact is the anti-ESG campaign having on company ESG goals?
To help companies answer these and other critical questions, we are publishing our fourth annual look at the “State of U.S. Sustainability Reports,” analyzing 250 sustainability reports from S&P 500 companies published in 2024 to date. In this report, we provide (i) our study methodology; (ii) our top 10 takeaways from 2024 Sustainability Reports; and (iii) 20 key statistics of 2024 Sustainability Reports.
We plan to publish additional thought leadership pieces on related 2024 Sustainability Report topics later this year.
Study Methodology
We analyzed 250 sustainability reports from S&P 500 companies published between January 1 – July 30, 2024 (“2024 Sustainability Reports”). For the purposes of this report, all references to 2024 Sustainability Reports refer to any annual ESG disclosure report regardless of its naming convention. The majority of 2024 sustainability reports analyzed were published by large-cap companies with a sector profile that generally aligns with the S&P 500.
Top 10 Takeaways From 2024 Sustainability Reports
01: The acronym “ESG” is down but certainly not out. The most common key word in 2024 report titles was “Sustainability” (39%), overtaking last year’s leader “ESG” (24%, down from 35% in 2023). However, the “ESG” acronym appeared 62 times within 2024 Sustainability Reports on average, and most companies that dropped “ESG” from their 2024 report title used it within their 2024 report.
02: Sustainability reports are getting longer, not shorter. The length of 2024 Sustainability Reports increased for the third year in a row, averaging 83 pages (up 20% from an average of 70 pages in 2021). There was a broad range of page lengths in 2024 Sustainability Reports, with the shortest being 15 pages and the longest being 211 pages.
03: More companies are now living in a double material world. Almost 80% of companies conducted a materiality assessment – about the same percentage as last year. However, the number of companies that have completed (or were in the process of completing) “double” materiality assessments tripled from 9% in 2023 to 27% in 2024.
04: CEOs are increasingly accountable for ESG strategies. CEOs were noted as ultimately responsible for company ESG strategies 32% of the time – almost double the amount in 2023 (18%). Like last year, CEOs signed a supermajority of 2024 Sustainability Report cover letters with other executives (e.g., Chief Sustainability Officers) also signing cover letters about a quarter of the time.
05: [DE]I will survive. Despite current challenges to these efforts, 94% of companies continued to use the term “DEI” in some form within their ESG reports, a very modest decrease from last year. Among those that adjusted their disclosure practices, most opted to restructure their sections to focus more broadly on themes of belonging and inclusion, rather than removing the DEI section entirely.
06: Sustainability reports are being issued with less pomp but with more circumstance. The number of companies issuing press releases with 2024 Sustainability Reports was down significantly (49%) from when we first started tracking this in 2021 (75%). However, ESG microsites are ubiquitous, providing stakeholders with a variety of opportunities to interact with a company’s ESG initiatives.
07: The EU CSRD and IFRS disclosure frameworks begin to surface. Mentions of the EU CSRD disclosure framework increased from 0% in 2023 to 13% in 2024, while 5% of companies mentioned the IFRS. SASB and TCFD sustainability disclosure frameworks continue to dominate with approximately 90% prevalence, with the GRI (73%) and UN SDGs (64%) also continuing to be widespread.
08: External assurance increasingly includes “Social” data points. The percentage of companies obtaining external assurance of at least one ESG data point held steady at 62%. However, more companies added social data points when getting environmental data assured 32% of the time in 2024, up from 22% in 2023.
09: Company ESG goals are in a transition phase. Fewer companies provided an ESG goals progress section in 2024 (36%) than in 2023 (46%). Accordingly, the number of companies signaling that at least one ESG goal was “off-track” dropped from 22% in 2023 to 8% in 2024.
10: Responsible AI enters the ESG chat. Approximately 21% of companies notes its responsible use of AI within its 2024 Sustainability Report. While this is the first time we have tracked this data point, we expect this trend to significantly grow in the coming years.
Key Statistics of 2024 Sustainability Reports
I. Sustainability Report Communications Characteristics
II. Sustainability Report Content Characteristics
III. Sustainability Report Governance Characteristics
1Note we only reviewed reports published from January 1 to July 16, 2024.
