Only 39 per cent of the top 500 publicly traded US companies disclosed water use in their financial or sustainability reports in 2012, a new report has found.

Among these companies, water was viewed principally as a cost or as a potential risk due to scarcity. Several companies with water-intensive manufacturing or other operational needs had completed or had begun to undertake assessments to review current and future demand, availability and associated operational risks.

These are the findings of a study ‘Integrated Financial and Sustainability Reporting in the United States’ from the IRRC Institute and the Sustainable Investments Institute, the first report to comprehensively benchmark the status of integrated reporting in the USA.

The report found that all but one of the Standard & Poor’s 500 companies made at least one sustainability related disclosure, but only seven, or 1.4 per cent integrated financial and sustainability reporting.

The 7 companies which included a statement on integrated reporting, were American Electric Power, Clorox, Dow Chemical, Eaton, Ingersoll Rand, Pfizer and Southwest Airlines. Zions Corporation was the only company not to include any sustainability disclosure.

The 285-page report analyses sustainability disclosures on a sector-by-sector basis, and examined a total of 56,000 individual data points, across both mandated SEC filings and voluntary sustainability reports.

Of the companies studied, 74 per cent placed a dollar figure on at least one sustainability-related initiative.

Disclosures of environmental management and climate change were the most common among the companies, with 68 per cent and 66 per cent of companies disclosing, respectively.

Hazardous waste, product formulations and waste management were also more commonly reported than water use.

Jon Lukomnik, executive director of the IRRC Institure, said:

“As the report demonstrates, disclosure per se is commonplace today. But isolated sustainability disclosures are of limited value, both to corporate managements trying to improve the bottom line and to investors trying to gauge risks and opportunities. The challenge today is to connect the dots between sustainability initiatives and corporate earnings and then to quantify the causal relationship.

“Clearly, there is a linkage. For instance, I found it intriguing that nearly half the companies consider sustainability in determining at least some portion of executive compensation. But for far too many sustainability factors, across far too many reports, quantification is lacking, leaving managers without tools and investors to wonder how carefully they are being managed.”

Deputy director of Sustainable Investments Institute and report co-author Peter DeSimone added that though companies often omitted financial estimates for the impacts of their sustainability efforts, it did not mean they were not capable of doing so.

“The report’s data indicate that by not scaling up sustainability initiatives and coordinating them through a unified corporate strategy, many companies may be missing opportunities to improve financial results,” he said.