3.4.1 Overview

The US was in 2016, the world’s largest economy, followed by China and Japan.1 In 2015 the US had a GDP of 17,95 trillion USD, 321,4 million of inhabitants and an unemployment rate of 5,3%.23The US population represents less than 5% of the world’s population and Americans,4on average, consume 26% of the energy in the world. Americans consume around 15 times more energy per person than a developing country.5 Between 1850 and 2011, the US was responsible for 27% of the world’s carbon dioxide emissions compared to 25% in Europe, 11% in China and 1% in Brazil.6 The fast pace that business operates, the constant focus on short term results and also the growing influence of politics in the way businesses functions (Larry Fink, CEO BlackRock, 2012)7 are, among others, some of the reasons why sustainability has not developed further. This is true globally and not only in the US. Besides short termism in business there is also short termism in politics (Larry Fink, 2012), the short term life cycle of a CEO, which is on average around 5 years and shorter than the one of a US senator.8 This short termism means that Governments and businesses do not have the necessary continuity on their policies and become too focused on their own term. Short-termism in politics is a global shortcoming that contributes to market uncertainty (Larry Fink, 2016).9

Although sustainable growth develops slowly in the US, corporate governance regulation, shareholders pressure and investor’s demand for increased Environmental, Social and Governance disclosures indicate that change is under way. Actually, in the US since the seventies, 70% of the population has been consistently supportive of the environment’s protection.10 Also, since 1994 the Pew Research Center has been conducting a poll asking the President and Congress about their priorities. In 2016, 47% of the inquired replied that protecting the environment should be a top priority, however, the issue ranked in 13th among the 18 issues examined.11 A possible reason pointed out was that “Americans think policymakers, regulators, and activists are paying sufficient attention to environmental issues and that they want them to turn their attention to more pressing concerns”, as since the financial crisis in 2008, the concerns were mainly financial, terrorism and healthcare.12 These general concerns only change focus when there is an urgent issue, as water or soil contamination, are located in a single area, as it happened in Flint Michigan in the US.13 One example of a large investor committed to sustainable development and long term value creation is BlackRock, the world’s largest investor with USD $4.6 trillion under investment. Larry Fink, CEO at BlackRock, sent in February 2016, a letter to all CEO’s at S&P 500 companies and large European companies in which BlackRock invests on behalf of their clients. In his letter, Larry Fink calls the CEO’s attention to short-termism in the US but also in Europe, both in business and politics, and asked them to “lay out for their shareholders a strategic framework for long-term value creation – one that provides a perspective on the future, articulates the impact of the ecosystem on their strategy, explains how changes in that ecosystem might force the company to change course and identifies metrics that support a framework for long-term sustainability.”1415Then in April 2016, Larry Fink addressed BlackRock’s shareholders in a letter part of BlackRock’s 2015 annual report, highlighting BlackRock’s commitment to create long-term shareholder value and explaining its strategic framework for long-term shareholder value creation.16 The commitment of such an investor and proactive reach out to the corporate sector can have a big impact in mobilizing more companies and investors to develop sustainable business practices. In a positive note of change, in the 2016 Global 100 Most Sustainable Corporations in the World index, 18 companies were American.17

Below I outline the most relevant developments of mandatory and voluntary sustainability reporting in US and how the country is adopting a more proactive approach to sustainable development.