FLASH REPORT: G&A Institute and Trust Across America Partner to Examine Trustworthiness for S&P 500® Companies Not Reporting on Sustainability

Posted on March 24, 2016 by Louis Coppola

#Business & Society #Corporate Governance #Corporate Responsibility #Corporate Sustainability #ESG Issues #Materiality #Sustainability Big Data #Sustainability Professionals #Sustainability Reporting 

Results Show Higher Trust for Firms Reporting on Their Sustainability Journeys
New York, NY – March 24, 2016 — Continuing the in-depth analysis of S&P 500 (r) companies’ sustainability reporting activities, Governance & Accountability Institute teamed with the Trust Across America / Trust Around the World program to explore potential relationships of the trustworthiness of companies that do and do not report utilizing the TAA/TAW’s proprietary  FACTS® scoring. FACTS® analyzes approximately 2000 US based public companies on five quantitative indicators of corporate trustworthiness. TAA/TAW has found that companies with higher FACTS® scores are more profitable and over time their stocks outperform major indexes.
Trust Across America analyzed the current year’s data for the S&P 500 companies that G&A identified as reporting on Sustainability, versus the shrinking minority of identified non-reporter, and found the following.  Of the 99 companies that do not publish sustainability reports, TAA had data on 72 of them, and of the 401 reporting companies, TAA has data on 398 of these companies.  Looking at this universe of a total of 470 companies with full data from both parties, G&A and TAA determined that:

  • S&P 500 reporting companies have a 15 percent higher FACTS® Score than non-reporters.
  • Reporting Companies have a 15% higher average FACTS® score 55.84 vs. 44.36.
  • For non-reporting companies, the lowest FACTS® score is 31, shared by Urban Outfitters and Synchrony Financial. 
  • The highest tFACTS® score of the entire group is 78 for Southwest Airlines – a reporter.
  • 75% of reporters scored 50 or over on FACTS®, versus only 51% of non-reporters
  • 49% of non-reporters scored under 50, versus only 20% of reporters

This chart illustrates the percentage of S&P 500 non-reporters versus companies that report on Sustainability in the various TAA scoring bands:

Trust Across America developed its “FACTS® Framework” seven years ago; the audit model’s approach is to combine financials and non-financials in measuring trustworthy business behavior to tell an integrated, unbiased and unified story to stakeholders.  The “FACTS” Framework elements are:  “F” for financial stability and strength; “A” for accounting conservativeness; “C” for corporate integrity; “T” for transparency; and “S” for sustainability. All indicators are equally weighted. The framework is applied to more than 2,000 companies to determine the “High Trust” enterprises on a scale of 1 to 100 with 100 being the highest.  Companies do not participate in the independent annual analysis.
Commenting on the TAA/TAW findings, CEO/Co-founder Barbara Brooks Kimmel said: “Understanding that no company is perfect, it comes as no surprise that companies choosing to voluntarily report their sustainability practices score substantially higher in our FACTS® Framework. The “best” companies have incorporated organizational trust as an intentional business strategy and seek to meet the long-term needs of all their stakeholders, not just shareholders.”
For information: http://www.trustacrossamerica.com
Background:  G&A’s Flash Report (March 15, 2016)
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:

About Governance & Accountability Institute, Inc.
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 concernsG&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.

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Louis D. Coppola
Co-Founder, EVP & Chief Architect of Research Projects
Governance & Accountability Institute, Inc.
Tel 646.430.8230 ext 14
Email lcoppola@ga-institute.com