Editor’s note: This Sustainability Matters post was written by guest contributor Tyler Hamilton, who is editor-in-chief and associate publisher of Corporate Knights, the magazine for clean capitalism. Its sister division, CK Capital, ranks companies and industries based on their environmental, social, and governance performance.
Of all industries, media is unique in its ability to inform the general public about the many impacts of climate change, the effects of air pollution, and other environmental and social sustainability issues.
Like all industries, however, it leaves behind a footprint that contributes to these same local and global problems.
So what is that footprint, and how does it compare to other industries?
The short answer: It’s difficult to say.
Intuitively, we know that media companies will have a lower impact than extractive and industrial sectors, such as energy and manufacturing, simply because the nature of the business is knowledge and content driven.
As major consumers of paper, some segments of the media industry – e.g., publishing – have increased their use of recycled paper or paper made from sustainably managed forests and certified by bodies such as the Forest Stewardship Council.
This, combined with the transition to digital publishing, is making a difference.
“This is in stark contrast to the advertising sector, where the use of recycled paper is rare and commitment to certification is weak,” reads a 2011 report from the Richard Ivey School of Business, which analysed the environmental, social, and governance performance of 81 companies in movie production, publishing broadcasting, and advertising.
The report also found 50% of media companies have adopted environmental management systems to improve their environmental performance, though few are third-party certified.
Beyond this, however, it’s difficult to paint an accurate picture of how the media industry is performing.
The reason is simple: poor disclosure. CK Capital, the research and financial division of Corporate Knights Inc., tracks two dozen industry groups as part of its annual Global 100 ranking of the world’s most sustainable corporations.
When we look at the four key performance indicators (KPIs) related to resource productivity – i.e., energy use, greenhouse gas emissions, waste production, and water use per unit of revenue – we find that large publicly listed media companies collectively rank near the bottom of the pack on disclosure.
For example, in 2012, only 12% of media companies disclosed their energy consumption, 14% reported emissions, and 13% reported water use. The worst KPI was waste production, which saw a disclosure rate of only 10%.
Compare that to the auto industry, which had disclosure rates of 35%, 20%, 31%, and 35%, respectively.
“It’s not a surprising result as the media industry, unlike some others, is considered to have a lower impact, so there is less incentive for media companies to report,” says Michael Yow, lead analyst at CK Capital. “However, this should not be a reason for a company not to act as a responsible corporate citizen by reporting its impact and contribution to the environment and society.”
Poor disclosure explains why media companies haven’t had a strong presence on the Global 100 during the past few years. In 2011, media companies were absent from the global list, while only one made an appearance in 2012.
This year’s list saw two media companies. The trend is positive, but compared to other industries – for example, 10 banks and 11 energy companies appeared on the 2013 Global 100 – the media industry has a long way to go.
Corporate Knights penalises companies that don’t disclose KPI data by giving them a zero score. Disclosure, even if a company’s performance is expected to be poor, is still better than non-disclosure. It is for this reason that we encourage all companies to disclose across all categories, regardless of performance.
Only by getting a complete picture of how an industry is performing can we take the steps necessary to lower social and environmental impacts. After all, can a newspaper accurately tell a story to its readers if the story lacks the key facts?