How concerned are 300 of the major US companies about climate change

Climate change is an issue that is already on the agenda of any large company. However, often what companies say publicly is very different from what they actually do. On this subject, the best way to audit how a company addresses the environmental crisis is to study the 10-K annual reports, which are financial documents that public companies in the United States submit each year to the Securities and Exchange Commission (SEC).

An analysis of these types of documents from 300 companies over the past 10 years shows that some began to deal with issues related to climate change in 2012. This means that they moved from speech to action and took a more active position to face the crisis, Time magazine reported.

Patrick Callery, a professor at the University of Vermont who studies companies address climate change, is skeptical and compares this change in companies to an emotional shock. “First we deny it, then we accept it, and then, at some point, we do something about it,” he says, adding: “I think at this point we are in the acceptance stage and companies are talking about doing things, but I don't think, to a large extent, companies are actually doing things yet.”

The research done by Time magazine found that it is now very common for companies to refer to climate change, although on many occasions they do so in a vague way. According to the analysis, less than half of the 300 companies mentioned climate change or similar words in the 10-K of 2012. However, in 2021, the figure was 91 percent. Sustainability was another widely used word in the company's reports, which soared from 27% to almost 80%. It was also found that companies began to adopt corporate ideals around environmental, social and governance standards.

However, despite these figures, the language used in companies' plans to achieve their climate goals remains uncommon. For example, the phrase renewable energy went from 15% to 37%, while the environmental impact went from 14% to 26%.

To carry out its analysis, Time prepared a list with 200 words, phrases and acronyms related to climate change with contributions from prestigious experts in the field. For the selection of the 300 companies they were guided by the S&P index.

In the research, they found that environmental issues have more weight in submissions to the SEC than the sustainability reports published by companies on their websites. This can be explained by the fact that 10-K annual reports are subject to much greater scrutiny and if the information they provide is misleading may have legal consequences.

In recent years, the issues referred to as “climate goals” and “social responsibility” have doubled in the reports. In part, this indicates that companies are recognizing their responsibility and are setting targets for better environmental practices.

Time points out where companies' climate efforts could be directed. For example, the concept of “climate measurement” could begin to be implemented more broadly. New concepts and policies to be adopted will also depend on the demands of the US authorities on companies.

Callery believes that many companies are reluctant to make investments to meet emissions reduction targets. “The time frame for these goals is so far into the future that companies don't really have to do anything about them right now,” he says.

However, Mindy Lubber, executive director of the sustainability nonprofit Ceres, has another look. He says that companies are trying to meet that challenge in reaction to investor demands and the momentum of the US authorities. “Over the past three years there have been mini-revolutions, going from companies that planted a tree or something insignificant to actually achieving it,” he says.

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