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Tomorrow's
value research
Highlights
In the drive for greater transparency, companies are increasingly providing reliable accounts of their sustainability strategies. However, on a global scale they are far from delivering solutions to the most pressing sustainability problems and they risk losing sight of the bigger sustainability challenges facing society at a global level.
That is one of the most striking findings of this year’s Tomorrow’s Value Research (TVR), the annual assessment of corporate sustainability practices by Two Tomorrows.
The TVR 2012 reveals that companies today are increasingly aware of sustainability issues and actively integrate sustainability into core business strategy and decision-making. They are opening up and describing in detail how they define material issues, engage stakeholders and join multi-stakeholder initiatives. However, as they become more responsive to the Global Reporting Initiative (GRI) sustainability reporting guidelines and other reporting frameworks, they are failing to adequately put their performance into context.
Now in its ninth year, the TVR examines the sustainability strategies of the 25 largest companies by revenue in each of three regions: the Americas, Asia/Australia, and Europe, the Middle East and Africa (EMEA). It also assesses the 2011 DJSI Supersector Leaders, the top performers in each of the supersectors in the Dow Jones Sustainability Index.
Other key findings
- The largest companies fall short of sustainability leadership
Less than a third of the largest companies scored over 70 per cent, the threshold for ‘leadership’ in the TVR. Indeed, even many of the 19 DJSI Supersector Leaders fell short – only 10 scored more than 70 per cent.
- Innovation is the key
A common theme of successful sustainability strategies is innovation. This is not the innovation in which engineers pore over computer screens and lab benches. Rather, these are business innovation approaches: embedding sustainability into systematic innovation, applied company-wide, disseminated to supply chains and throughout product lifecycles, based on internal and external stakeholder feedback.
- A lack of balance still pervades reporting
Many large companies, including those who demonstrate some advanced sustainability practices, still tend to gloss over some significant negative social and environmental impacts.
Key facts
- Largest 25 companies in each of three regions – average score: 54%
- DJSI Supersector Leaders – average score: 69%
- Proportion of all companies studied scoring above 70%: 28%
- Proportion of DJSI Supersector Leaders scoring above 70%: 53%
More detailed findings, including examples of best practice, are available in our PDF report – just fill out the simple form on the right.
Tomorrow’s Value benchmarking
You can get an objective measure of your company’s sustainability performance and learn from best practice with a Tomorrow’s Value benchmarking report from Two Tomorrows.
We evaluate your sustainability strategy using all the criteria in the Tomorrow’s Value Research (TVR), and benchmark you against your peers and sustainability leaders. We provide clear recommendations for how you can strengthen your sustainability strategy and reporting. These are illustrated with examples of best practice from our unique TVR database of the sustainability practices of the world’s largest companies and the leaders in corporate sustainability.
To discuss or commission a Tomorrow’s Value benchmarking report, contact us.
Past results
The Tomorrow's Value Research 2012 builds on our previous work to assess corporate sustainability practices worldwide through our Tomorrow's Value Rating programme.
Leaders
The Tomorrow’s Value Research (TVR) 2012 identifies companies such as HP, Panasonic and Siemens that demonstrate world-leading sustainability practices. However, the majority of large companies lag some way behind. Less than a third of the largest companies scored over 70 per cent, the TVR leadership threshold. Indeed, even many of the 19 DJSI Supersector Leaders fell short – only 10 scored more than 70 per cent.
This year’s TVR also highlights sector and regional strengths. European companies continue to perform best overall, but the biggest improvements have come from large companies in Asia/Australia.
Not surprisingly, technology companies lead in applying innovation to environmental and social challenges. They have found ways to integrate stakeholder feedback to drive product development and efficient manufacturing.
Even so, the most robust management and governance arrangements continue to be demonstrated by the traditional high-risk industries. For instance, decades of experience of operating in challenging environments has helped oil and gas sector leaders develop best practices in risk management that integrate stakeholder feedback.
More detailed findings, including examples of best practice, are available in our PDF report – just complete the simple form on the right.
Tomorrow’s Value Research 2012: Key facts
- Standout companies:
Americas: Ford, GE, HP, Petrobas
Asia/Australia: Hyundai Engineering, Panasonic
EMEA: BMW, EON, Siemens - Regional average scores for largest 25 companies in each of three regions:
EMEA: 61%
Americas: 51%
Asia/Australia: 49% - Best-performing sector:
Technology
Best practices
Some best practices identified by the Tomorrow’s Value Research 2012:
HP
Leads the way in innovation on the strength of HP Labs and leading-edge lifecycle analysis that pulls in broad stakeholder feedback and addresses environmental and social impacts/benefits of products from sourcing to end-of-life.
Panasonic
Demonstrates one of the strongest management approaches to sustainability. Strategic target-setting in most areas, robust controls to manage performance against material issues and clear mechanisms for stakeholders to feed into management processes.
Siemens
A highly inclusive governance system for sustainability including mechanisms to identify stakeholders, gather feedback and take account of it in business priorities in a systematic manner.
Stockland
An overall strong performer, this DJSI Supersector Leader goes out of its way to describe the mechanisms by which stakeholders can engage with the company, influence decisions and drive product improvements.
Westpac Bank
One of the more integrated business and sustainability strategies includes integrated metrics and a wide range of products with environmental and social credentials.
More detailed findings, including examples of best practice, are available in our PDF report – just fill out the simple form on the right.
Tomorrow’s Value benchmarking
You can learn much more about good and emerging sustainability management practices by commissioning a Tomorrow’s Value benchmarking report from Two Tomorrows.
We evaluate your sustainability programme using all the criteria in the Tomorrow’s Value Research (TVR), and benchmark you against your peers and sustainability leaders. We also provide clear recommendations illustrated with examples from our unique TVR database of the sustainability practices of the world’s largest companies and the leaders in sustainability.
To discuss or commission a Tomorrow’s Value benchmarking report, contact us.
Methodology
The Tomorrow’s Value Research (TVR) examines companies’ performance against 15 criteria. We base our assessments on companies’ public disclosures including annual reports and sustainability or CR reports.
Tomorrow’s Value Research criteria
1. Is the core business model sustainable?
2. Do the company's operations or historical performance indicate a clear risk of accident, incident or harm to the environment or detrimental impact on society?
3. Does the company have systematic processes for integrating sustainability and non-financial risks/opportunities into its core business decision-making?
4. Does the company have an executive governance model that allows for and actively integrates a wide range of stakeholder feedback?
5. Is the company position and communication on sustainability balanced?
6. Does the company demonstrate positive performance against material issues?
7. Does the company have the capacity to manage material issues?
8. Does the company have a strong understanding of material issues?
9. Does the company set effective targets to promote performance?
10. Does the company consider and manage upstream and downstream impacts?
11. Does the company effectively engage stakeholders?
12. Is the company an active participant in multi-stakeholder initiatives to address material issues for the sector?
13. Does the company effectively use a wide range of stakeholder feedback to drive product and/or operational innovation?
14. Does the company have a systematic process to innovate products and/or operations to create greater social and/or environmental impacts?
15. Is there evidence that the company is exploring leadership opportunities through innovation in sustainable practices or products and integrating these opportunities into the core business model?
The criteria questions are designed to assess the ability of a company to deliver on its potential to be sustainable in terms of environmental and socio-economic risks and opportunities. The questions reflect the qualitative nature of sustainability management and performance. Sustainability practice balances many factors including differing stakeholder priorities, differing risks and opportunities for various sectors and operating regions, variability in core business models and variability in regulatory requirements. In the face of this complexity and variability, the TVR relies on the expertise of the research team and feedback from evaluated companies on our methodology.
Our criteria have been developed over nine years in conversations with global leaders in sustainability and business management.
Moderation process
To ensure consistency and fairness across evaluations, we carry out a formal moderation process:
- Evaluators compile evidence and commentary for each score assignment. This analysis is made available to the moderators.
- Scores for all companies are reviewed for outliers based on our experience – for example a low score for a widely regarded strong practitioner.
- A select set of direct comparisons is established – for example, two oil and gas companies evaluated by two different evaluators will be reviewed by the moderators in detail to look for discrepancies in scoring
- Any ‘red flags’ raised during the moderation are discussed with the evaluation team to determine if adjustments to scoring need to be undertaken.
Companies studied
The Tomorrow’s Value Research 2012 examines the sustainability programmes of the 25 largest companies by revenue in each of three regions: the Americas, Asia/Australia, and Europe, the Middle East and Africa (EMEA). It also assesses the 2011 DJSI Supersector Leaders, the top performers in each of the 19 supersectors in the Dow Jones Sustainability Index.
Research team
The Tomorrow’s Value Research is carried out by a team of sustainability experts. They all have deep and extensive experience in sustainability programme implementation as well as communication and reporting practice. All have experience in sustainability auditing through AA1000AS-based assurance projects as we feel this is an important primer for understanding what aspects to look for to assess sustainability systems and performance.
A fuller description of the TVR methodology, including the full list of companies studied, is available in our PDF report – just fill out the simple form on the right.
