Everyone in the investing world and the corporate suite knows of the importance of the S&P 500 Index®; it’s the intellectual property of the S&P Dow Jones Indices unit of S&P Global and is the widely used benchmark by which asset managers track their performance (against the index performance).
Many investments are benchmarked to the index – almost a total of US$8 trillion, in fact. The index is made up of 500 leading (large-cap) public companies and represents roughly 80% of the total market capitalization of these enterprises. The index was launched 60 years ago (in March 1957).
Investopedia explains that the index covers the majority of the US economy and is considered by experts to be a highly reliable indicator of overall stock market performance. The index managers select corporate stocks to be in the index by a number of factors, according to liquidity, market size and industry category; and, the company included represents a proportion of the portfolio. There are small changes year-to-year in the index as companies are selected in and dropped from inclusion.
The G&A Institute team in carefully tracking the increasing embrace of sustainability by US companies, and the reporting on the “sustainability journey” by these large-cap public companies began analyzing the S&P 500 companies’ disclosure and structured reporting on sustainability (and related terms, such as corporate responsibility, environmental update, corporate citizenship, and others).
Our first analysis was shared publicly in 2011, for the results of year 2010 company reporting. We found that just about 20% or one-in-five of the S&P 500 universe was publishing a sustainability report in some form. That became our baseline. The 2012 reporting analysis revealed a dramatic increase — more than half of the companies were then reporting (the tally was 53%).
The number increased considerably in 2013 to 73% and then 75% the following year. By 2015 the tally was 81% (eight of 10 companies in the index) and now we have year 2016 results — holding steady at 82%. We share the news broadly in our Flash Report at the conclusion of the analysis — that’s our Top Story for you this week.
Our analysis includes identifying GICS sector reporting (financials, health care, energy, etc.), and the increase year-to-year where that occurs within a sector.
G&A’s EVP Louis Coppola has been the architect of the S&P 500 analysis, with the careful analytical work done by successive teams of outstanding intern-analysts over the years. This year’s team includes Alvis Yuen, team leader who has worked on the annual analysis for several years now; and team members Amanda Hoster, Elizabeth Peterson, Juliet Russell, Alan Stautz, Yangshengjing “UB” Qiu, and Olivia (Sihui) Wang. We thank these outstanding professionals for their dedication and hard work completing the analysis.
The investment community takes a close look at the G&A Institute research and each year reaches out to the non-reporters (a shrinking base, we’re happy to say) for engagement, and often, targets for filing shareholder resolutions to encourage the start of reporting on the corporate sustainability efforts. (In many cases for the holdouts, there are no such efforts underway — and so, no reports!)
You’ll find more details about the 2017 work (examining 2016 reporting results) in our Flash Report. Do send us an email if you have questions about the exercise if you would like to have more information.
Read more at:
FLASH REPORT: 82% of the S&P 500 Companies Published Corporate Sustainability Reports in 2016
(Wednesday – May 31, 2017)
Source: Governance & Accountability Institute, Inc. – In the sixth annual monitoring and analysis of S&P 500 Index® company sustainability reporting, just completed by the Governance & Accountability Institute research team, the findings are that eighty-two percent (82%) of the companies included in this important investment benchmark published a sustainability or corporate responsibility report in the year 2016.
The S&P Index is one of the most widely-followed barometers of the US economy, and conditions for large-cap public companies in the capital markets.
To put this in context, in charting prior years reporting, G&A found that:
- in the year 2011, just under 20% of S&P 500 companies had reported on their sustainability, corporate social responsibility, ESG performance and related topics & issues;
- 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;
- in 2015, 81% of the total companies were reporting;
- in 2016, 82% signals a steady embrace by large-cap companies of sustainability reporting.