Study

Global Corporate Leaders Leave Investors Blind on ESG

DGAP-Media / 03.03.2021 / 13:11 Study: Global Corporate Leaders Leave Investors Blind on ESG ESG reporting by the largest listed companies from Europe, the US and Australia lacks comparability and transparency. Only 27% of all reports offer a reporting methodology, 19% disclose how their data was gathered and only 19% describe how the companies' ESG stakeholders are identified. European companies dominate Global ESG Monitor Ranking - eight of the top 10 companies are European. Reporting ESG through a separate non-financial report led to better results than bundling non-financials with an annual report. Reports fulfil the accounting metrics of the international SASB standards only to a degree of 29%, despite twice as many reports (57%) referencing SASB.   Wiesbaden, Washington D.C., Melbourne, March 3 2021. The state of transparency in corporate sustainability reporting leaves big blind spots for investors. This is revealed by the Global ESG Monitor (GEM) - a study of ESG reports from the largest listed companies in Europe, the United States and Australia. "Corporate ESG reporting shows remarkable differences in quality within and between the regions surveyed. Here, Europeans are often one-eyed kings among the blind," says Michael Diegelmann, CEO of German investor relations and ESG consultancy cometis. For the study, a total of 140 companies from the leading indices DAX (Germany), EUROSTOXX-50 (Europe), Dow Jones Industrial Average (USA) and S&P/ASX-50 (Australia) were analysed. Both non-financial information in the annual reports (85 integrated non-financial reports - I-NFR) and in official sustainability reports (100 separate non-financial reports - S-NFR) were considered. The research analysts used a variety of research methods and developed a proprietary analysis method, GEM ASSAY(TM), which uses data along with quality-evaluation criteria such as comprehensibility, transparency, measurability, comparability, timeliness, adequacy and reliability. The GEM ASSAY(TM) consists of 53 general and 490 industry-specific criteria, the latter of which were defined working with the "accounting metrics" of the Sustainability Accounting Standards Board (SASB). Other frameworks, like the Global Reporting Initiative (GRI) and the UN Sustainable Development Goals (SDGs), also informed the study criteria.