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

Posted on April 26, 2016 by Louis Coppola

#Business & Society #Business Case #Corporate Responsibility #Corporate Sustainability #ESG Issues #Investment Case #SRI #Sustainability Big Data #Sustainability Reporting #Sustainable Investing 

– Results Show Companies Not Publishing Sustainability Reports Are Disadvantaged by Lower Average Bloomberg ESG Disclosure Scores 

New York, New York — April 26, 2016 — 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.  

About Bloomberg ESG Disclosure Scores 

Hideki Suzuki, Senior Corporate Governance Data Analyst at Bloomberg, explained: “The Bloomberg ESG disclosure score is purely a gauge on transparency – assessing how much ESG quantitative and policy-related data a company is disclosing, regardless of improvement or deterioration on the metrics over time. Scores are low for disclosure without quantum. This explains low scores among reporters. For example, we see lengthy sustainability reports with charts and graphs but contain no numerical data.”
He continued: “ESG investment space continues to evolve. We are moving beyond disclosure. Bloomberg provides performance assessment tools based on quant data provided by companies (http://www.bloomberg.com/professional/equities/). For that to be meaningful and actionable by investors, we need quality data from companies that is aligned with company fiscal year-end and scope of disclosure covering what is covered in their financial statement disclosure.”
About Bloomberg LP 
Bloomberg LP is a global business and financial information and news leader with more than 325,000 global subscribers to its Bloomberg Professional Service, a data, analytics and information-delivery service. Bloomberg ESG products enable investors across a range of asset classes to understand the risks and opportunities associated with potential investments or counterparties as the market continues to embrace ESG.
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 for Editors 
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

Founded in 2006, G&A Institute is a sustainability consulting firm headquartered in New York City, advising corporations in executing winning strategies that maximize return on investment at every step of their sustainability journey. The G&A team helps corporate and investment community clients recognize, understand and address sustainability issues to address stakeholder and shareholder concerns. G&A Institute is the exclusive Data Partner for the Global Reporting Initiative (GRI) in the USA, UK and Ireland. A G&A team of six or more perform this pro bono work on behalf of GRI. Over the past 5 years, G&A has analyzed more than 5,000 sustainability reports in this role and databased more than 100 important data points for each of the five thousand reports.
G&A’s sustainability-focused services and resources include: counseling & strategies for the corporate sustainability journey; sustainability reporting assistance; thorough materiality assessments; stakeholder engagement; benchmarking; enhancing investor relations; sustainability communications; manager coaching, team building & training; advice on third party awards, recognitions and index inclusions; issues monitoring & customized research.
*S&P 500® 
According to S&P Dow Jones Indices / McGraw Hill Financial: “The S&P 500® is widely regarded as the best single gauge of large cap U.S. equities. There is over US$7 trillion benchmarked to the index, with index assets comprising approximately US$ 1.9 trillion of this total. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.” The S&P 500 is a trademarked® property of S&P Dow Jones Indices, McGraw Hill Financial.