For a growing number of companies in the Pittsburgh region, the bottom line is including more than gross revenues, operating costs and net profit.
Over the last five years, the demand by investors for Corporate Social Responsibility (CSR) reporting by companies has tripled, and more and more Pittsburgh area firms are now incorporating sustainability and CSR data with their traditional financial reporting.
“Companies are realizing they cannot act alone,” said Matt Mehalik, program manager at Sustainable Pittsburgh. “There are others in the marketplace; there are customers, there are suppliers and local communities that are part of their success. So a company is sharing information about its impacts on society, the stakeholders, investors, employees about social issues and environmental issues and governance issues.”
He said decisions on how to allocate $1.3 trillion worldwide are being made using sustainability and corporate social responsibility criteria. For example, he said, investors can obtain information on the computer chip industry “and get data on who’s disclosing their risks for water sourcing availability or who is someone who has violated laws with disposal of hazardous products repeatedly, and they can get that information, and so if you’re an investor, you’re going to want to pick the companies where those risks aren’t present.”
Mehalik said the growth in CSR reporting involves global firms but companies of various sizes.
“We have some companies that are one the medium and small size scale that find it beneficial for their customers and their communities if they also participate in CSR reporting,” Mehalik said.
Those small and medium-sized companies include Pitt Ohio Express, a trucking services firm; Eat’n Park Hospitality Group; and Thar Energy, a green energy solutions company.
More than 150 firms in the Pittsburgh area are and others such as UPMC and Highmark participate in Sustainable Pittsburgh’s Sustainable Business Compact.
“Those are around 12 different areas of sustainability," Mehalik said. "They’re sharing information with how well they’re performing according to those 12 categories.”
According to Mehalik, the information is not only useful to investors and portfolio managers but also to individual consumers whether they’re looking for a car or for toys for their children.
“It’s tough for consumers to sift through this information, but there are many watchdog groups that are looking at it and call attention to places where they see problems so those problems can be fixed,” he said.
He expects the rising demand for the information to continue.
“It’s growing at a rate of 40 percent a year,” Mehalik said. “This is almost like a killer app that’s out there now.”
And remember that bottom line? Mehalik said CSR reporting is more than just image building. “It has a greater impact on one’s business” as more investors and consumers demand the information, he said.