At G&A Institute we continue to look at the S&P 500® universe of companies in two groups: those companies that have published in some form a sustainability, corporate responsibility, citizenship or some related titling to publicly disclose important data and narrative on their ESG strategies, actions, performance and achievements. And, a second group, those companies that do not disclose / report on ESG factors.
This is an important corporate universe, representing more than 80% of the available market coverage and is the best single gauge of large-cap U.S. equities. Some US$7 trillion in Assets Under Management benchmarked to the S&P 500, including $1.0 trillion in index products.
When our team started tracking the ESG / CR / Sustainability reporting practices of these leading U.S. companies, we determined that just under 20% of companies had published data and narratives in 2011.That meant that 8-out-of-10 large-caps in the universe did not report. In 2012, we saw a dramatic shift: 53% — more than half of the 500 — were reporting. That increased to three-quarters of companies in 2014 and edged up to 81% reporting by 2015. And the non-reporters steadily declined to now only 19% of the 500 leading companies.
We partnered with Bloomberg LP as we continued our analysis to see if the reporting companies were favored with higher disclosure scores in the Bloomberg LP ESG dashboard resource, and if non-reporters were assigned a lower score. “The Bloomberg” is accessed by more than 325,000 professional users around the world and the ESG Dashboard is among the fastest-growing resources available to users.
Result: “Average Bloomberg ESG Disclosure Scores” assigned to reporting companies were higher for E, S, G and ESG combined scores. E and S score differences were pronounced – reporters were assigned higher averages. Makes sense: large-caps disclosing and doing structured reporting on their sustainability journey are providing this very important global investment information service provider (Bloomberg LP) with information needed to help investors evaluate risk and opportunity — and make important portfolio management decisions.
Our thanks for Hideki Suzuki, Senior Corporate Governance Analyst at Bloomberg for his collaboration with G&A. As he observes: “ESG investment space continues to evolve. We are moving beyond disclosure. Bloomberg provides performance assessment tools based on quant data provided by companies. For that to be meaningful and actionable by investors, we need quality data from companies that is aligned with company FY end and scope of disclosure covering what is covered in their financial statement disclosure.”
Sounds like the S&P 500 large-cap reporting companies have gotten the message! You can read the details of the Bloomberg – G&A Institute analysis via the link below:
FLASH REPORT: G&A Institute and Bloomberg LP Partnered to Examine Bloomberg ESG Disclosure Scores For S&P 500 Companies Reporting VS Not Reporting on Sustainability
(Wednesday – April 27, 2016)
Source: Governance & Accountability Institute, Inc. – Continuing the in-depth analysis of S&P 500 (r) companies’ sustainability reporting activities, Governance & Accountability Institute teamed with Bloomberg LP to analyze the data, scores and perceptions presented to investment professionals using the Bloomberg Professional information platform which features ESG data and assigns disclosure scores for public companies.