S&P 500 and ESG Reporting

August 9, 2021

Published: The CAQ

Key Takeaways

·       CAQ looked at the most recent publicly available ESG data for S&P 500 companies.

·       We found that 95% of S&P 500 companies had detailed ESG information publicly available. The information the CAQ examined was primarily outside of an SEC submission in a standalone ESG, sustainability, corporate responsibility, or similar report. Of the remaining 5%, most companies published some high-level policy information on their website.

·       Roughly 6% of S&P 500 companies received assurance from a public company auditing firm over some of their ESG information.

ESG Reporting Period

The timing and frequency at which companies report this information varies. Most commonly, S&P 500 companies disclosed that they report ESG information annually or intend to report annually going forward. Some companies release ESG data in tandem with their annual financial statements while others publish this information at a later time.

As of June 18th, 2021, the CAQ found that:

·       Approximately 54% of S&P 500 companies published ESG data for periods ending in 2020.

·       Roughly 37% of S&P 500 companies published ESG data for periods ending in 2019.

ESG Reporting Frameworks and Standards 

The CAQ examined how many companies referenced five commonly mentioned ESG reporting frameworks and standards – CDP (formerly known as the Carbon Disclosure Project), Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), The Task Force on Climate Change (TCFD) and Integrated Reporting (IR).

S&P 500 companies used these frameworks and standards to varying extents. Some fully adopted the framework or standard, some partially adopted, and others used the framework or standard as a reference when determining what information to include in their ESG reporting.

Assurance or Verification 

The CAQ looked at the most recent publicly available assurance or verification statement for S&P 500 companies as of June 18, 2021. More than half of S&P 500 companies (264 companies) had some form of assurance or verification over ESG metrics.

Assurance by Public Company Auditors

Third-party assurance from a public company audit firm can enhance the reliability of ESG information. Leading companies who used public company auditors to provide assurance over certain ESG information include: Google, Netflix, Salesforce, Kinder Morgan, Coca Cola, Verizon, UPS, and Johnson & Johnson.

S&P 100 Analysis

In addition to the S&P 500 the CAQ looked at the S&P 100 data separately to understand key trends in this population that may differ from the larger S&P 500 population.

While references to ESG reporting standards and frameworks remained relatively consistent across the population, the CAQ noted a decline in assurance or verification percentages from the S&P 100 to S&P 500. Where 82% of S&P 100 companies had some assurance or verification over their ESG disclosures, only 46% of the remaining 400 companies in the S&P 500 had some assurance or verification. Further 13% of the S&P 100 had assurance from a public company auditor as compared to less than 5% of the 400 remaining companies in the S&P 500.

The CAQ compared the S&P 100 population as of March 12, 2021 to the same population as of June 18, 2021 and observed the following:

·       The number of companies with assurance remained relatively consistent with 80 as of March 12th and 82 as of June 18th.

·       Two additional companies obtained assurance from public company auditors during this three-month time period, increasing the total number of companies with assurance over ESG metrics from a public company auditor from 11 to 13.

·       Where GRI was the second most referenced framework in this population as of March 12, 2021, SASB overtook GRI to become the second most referenced framework as of June 18th.Read the complete publication in: https://www.thecaq.org/sp-500-and-esg-reporting/

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