Reporting Proportions Show Enormous Increase Over Last Five Years
Disclosure and reporting on the corporate sustainability journey has become the consistent, reliable and clear norm for large-cap companies in the U.S. capital markets—and since the S&P 500 Index is the best single gauge for large-cap U.S. equities, capturing 80% of available market capitalization, The Government & Accountability Institute has analyzed the index company components’ sustainability reporting activities for the past five years.
G&A Institute charted the rapid and significant uptake in corporate sustainability reporting among the 500 companies—over the years, sustainability reporting rose from just 20% of the companies reporting in 2011 to 81% in 2015. This huge body of corporate reporting underscores the importance of setting strategies, measuring and managing sustainability issues in response to growing stakeholder and shareholder expectations—and in many cases, demands for such reporting, including information requests from major customers.
“We continue to see very clear demonstrations of the U.S. corporate community’s embracement of sustainability reporting. Measuring, managing and reporting on ESG (Environmental, Social and Corporate Governance) issues has been established as a mainstream practice in both the corporate and investment communities,” said Louis D. Coppola, executive VP of G&A Institute, who designs and coordinates the annual analysis, in a news release. “Leaders increasingly understand the critical importance of adopting and implementing strategies, products, services, programs and initiatives that reflect the 21st century business environment, and the interest of investors and important stakeholders.”
He adds: “Corporate reporters have also become more sophisticated in the disclosure and reporting activities, with an increased focus on using reporting concepts such as materiality, stakeholder engagement, comparability, balance, context, timeliness, and reliability to make ESG data more strategically useful for decision making by both management and stakeholders including investors.”
In the fifth annual monitoring and analysis of S&P 500 Index company reporting just completed by the G&A Institute research team, the findings are that more than four of five (81%) of the companies included in this important investment benchmark published a sustainability or corporate responsibility report in 2015.
To put this in context, G&A’s tracking in prior years reporting found that:
- In 2011, just under 20% of S&P 500 companies had reported;
- In 2012, 53% (for the first time a majority) of S&P 500 companies were reporting;
- By 2013, 72% were reporting—that is, 7 out of 10 of all companies in the popular benchmark;
- In 2014, 75% of the S&P 500 were publishing reports.
“As we continue to see a steady increase in corporate sustainability and responsibility reporting, we wonder what the thinking is in the non-reporting enterprises,” said Hank Boerner, chairman of the Institute, in the release. “These companies are now clearly laggards in this important peer group (the S&P 500), which is a very important benchmark for institutional investors. Are these companies not recognizing the significant range of benefits that accrue to their more sustainable peers? Do they understand the rising expectations of stakeholders seeking more information about their company’s environmental, social and governance performance? At the least, the companies seem to be resistant to the demands of shareholders for more information about their ESG policies and performance.”
As we entered year 2016, just 19% of the S&P 500 were not publishing sustainability reports. The practice of reporting by the 500 companies is now holding steady with minor increases year-after-year. The chart below represents the trends of S&P 500 sustainability reporting over the last five years:
The Missing Among Corporate Sustainability Reporters
This chart presents the number and percentage of companies from the sectors in the S&P 500 study that are choosing not to report on their sustainability opportunities, risks, strategies, actions, programs and achievements implying no focus on sustainability with comparisons from 2014 – 2015:
|SECTOR||2014 NR||2015 NR||Y/Y DIFFERENCE|
Source: Governance & Accountability Institute; edited by Richard Carufel