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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.
The average ESG Disclosure Score assigned by Bloomberg LP reflects the disclosure activities of companies related to their" E" (environmental), "S" (social/societal) and "G" (corporate governance) strategies, performance and related activities.
G&A Institute's EVP Louis Coppola noted: "The difference in average disclosure scores are greatest in 'E' and 'S' data in particular. The 'G' scores are higher in general and less of a difference due to the level of governance disclosure mandated in the United States of America and the general agreement on G's materiality. In contrast, there are only a few mandated disclosures in the E & S areas, with less decision-useful data being available, and more varied issues and opinions on the subject of materiality."
The overall results of the joint analysis show that companies that publish sustainability reports are scoring higher on the Bloomberg ESG Disclosure scores than companies that do not report:
- Bloomberg ‘E’ Disclosure Score
The average Bloomberg ‘E’ Disclosure score of S&P 500 non-reporters is 5, while reporters enjoy an average of 23, a 360% higher average ‘E’ score for reporters. - Bloomberg ‘S’ Disclosure Score
The average Bloomberg ‘S’ Disclosure score of S&P 500 non-reporters is 15, while reporters enjoy an average of 30, a 100% higher average ‘S’ score for reporters. - Bloomberg ‘G’ Disclosure Score
The average Bloomberg ‘G’ Disclosure score of S&P 500 non-reporters is 52, while reporters have slightly higher average of 58, a 12% higher average score ‘G’ for reporters.
The Importance to Sustainability to Bloomberg LP
In the company's Impact Report Update 2015, Bloomberg LP Chairman Michael Bloomberg noted:
"In recent years, we have taken a number of steps to enhance the data on sustainability that our products provide. We've added ESG data to the Bloomberg Terminal, purchased Bloomberg New Energy Finance, and helped to advance the emerging Green Bond Market. But our products can only be as good as the information they channel. And for the most part, the sustainability information that is disclosed by corporations today is not useful for investors or other decision-makers."
Michael Bloomberg became chair of the Sustainability Accounting Standards Board (SASB) in 2014, and last year agreed to chair the new Task For on Climate-Related Financial Disclosures, announced at the United National Climate Conference in Paris, France.
Background:
The Flash Report - March 15, 2016 from G&A Institute: In the fifth annual monitoring and analysis of S&P 500 Index® company reporting just completed by the Governance & Accountability Institute research team, the findings are that eighty one percent (81%) of the companies included in this important investment benchmark published a sustainability or corporate responsibility report in 2015.
The S&P Index is one of the most widely-followed barometers of the U.S. economy, and conditions for large-cap public companies in the capital markets.
To put this in context, G&A in tracking prior year(s) 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 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:
Governance & Accountability Institute's GRI Data Partner Report Analyst Research Team of talented interns contributed significantly to this research and we recognize them here:
- Julia Casciotti
- Alexander Cohen
- Kristina Jette Mullen
- Ashley Thomsen
- Alvis Yuen
For more information on our GRI Data Partner Report Analyst Research Interns, please visit http://www.ga-institute.com/the-honor-roll.html
