NEW YORK--(BUSINESS WIRE)--Governance & Accountability Institute (G&A) announces results of its inaugural study on 2018 sustainability reporting trends of companies in the Russell 1000 Index®. This research expands G&A’s annual studies, conducted for the last eight years of S&P 500® companies to include the next 500 largest companies in US Capital Markets.
G&A Institute’s research team determined that 60% of companies included in the total Russell 1000® published sustainability reports in 2018.
Note that the S&P 500® Index and Russel 1000® Index overlap, as they are market capitalization weighted indices containing roughly the largest 500 and 1000 companies in US capital respectively. This means the largest half of the Russell 1000® generally mimics the S&P 500®.
It’s also important to look at the second half of the Russel 1000® independently and to track growth of reporting in this subset of companies. When examining these two subsets (largest vs smallest half of Russell 1000®), G&A researchers found:
- Only 34% of the smaller half of the Russell 1000® published a report in 2018, in contrast to 86% of the largest half (S&P 500®) publishing reports the same year.
Of the 60% of Russell 1000® companies that do report:
- 72% were S&P 500® companies,
- 28% were from the second half of companies in the index.
Of the 40% of Russell 1000® companies that do not report:
- 83% were the smaller half of companies by market cap,
- 17% of the non-reporters were S&P 500® companies.
This indicates that the larger publicly-traded companies in the S&P 500® continue to set the pace for corporate sustainability and related reports by US companies. (see linked chart)
Louis Coppola, EVP/Co-Founder of G&A, who designs and manages the corporate reporting research and analysis, explains: "While it has become common knowledge through studies such as G&A’s S&P 500 research that the majority of large-cap companies are publishing sustainability reports, the prevalence of reporting by smaller companies has been lagging.
“Due to numerous pressure points from investors and other important stakeholders building up over the last few years, we anticipate this group of smaller companies is reaching a tipping point in terms of beginning to report on sustainability matters. We designed this inaugural research to keep our finger on the pulse of this trend. This inaugural research project will be continued each year by G&A Institute’s research team to track the reporting practices of this expanded group of companies.”
Hank Boerner, Chairman/Co-Founder of G&A, observes: "Over the past five years we have seen a dramatic increase in disclosure and structured reporting of large-cap US companies, especially as represented in the S&P 500 Index. These market leaders are responding to increased adoption of sustainable investing strategies and practices by asset owners and their internal/external asset managers -- especially fiduciaries such as public employee pension funds, mutual funds and ETFs.
“Also, large-cap companies are being asked questions by their B-to-B customers -- especially companies with prominent brands in consumer/business marketplaces. Internally, employees (the company’s human assets) are expecting and in some cases demanding action on sustainability issues such as climate change and diversity issues.
“The larger companies are devoting substantial resources to enhance their sustainability journeys and to robustly report on their progress. We expect to see this trend continue to move through the publicly-traded company universe, as well as privately-owned companies. This first report on the Russell-1000 Index companies is part of our ongoing monitoring of corporate sustainability reporting in the US and other countries.
“The results of our annual S&P 500 Index tracking of corporate reporting and now the first total Russell 1000 analysis are clear signals that important stakeholders, and especially providers of capital, expect that publicly-traded companies will be launched on their sustainability journey and telling the story of their progress on a regular basis.”
NON-REPORTERS AMONG THE BOTTOM HALF OF THE RUSSELL 1000®
The chart linked here presents the number of companies in the bottom half (by market cap) of the Russell 1000 from each GICS* sector that do not publicly report on sustainability implying no visible organized focus on corporate sustainability and ESG performance.
G&A’s research team of talented analyst interns – Minalee Busi, Jessica Caron, Emilie Ho, Jess Peete – led by Senior ESG Analyst/Team Leader Elizabeth Peterson -- made significant contributions to this study and we proudly recognize them here.
For more information on our GRI Data Partner Report Analyst Research Interns, please visit https://www.ga-institute.com/about-the-institute/the-honor-roll.html