June 8, 2017


82% of the S&P 500® Published a Sustainability Report in 2016 - Analysis Just Released on the Index Universe of Leading Companies

Everyone in the investing world and the corporate suite knows of the importance of the S&P 500 Index®; it's the intellectual property of the S&P Dow Jones Indices unit of S&P Global and is the widely used benchmark by which asset managers track their performance (against the index performance). 

Many investments are benchmarked to the index - almost a total of US$8 trillion, in fact.  The index is made up of 500 leading (large-cap) public companies and represents roughly 80% of the total market capitalization of these enterprises.   The index was launched 60 years ago (in March 1957).

Investopedia explains that the index covers the majority of the US economy and is considered by experts to be a highly reliable indicator of overall stock market performance. The index managers select corporate stocks to be in the index by a number of factors, according to liquidity, market size and industry category; and, the company included represents a proportion of the portfolio.  There are small changes year-to-year in the index as companies are selected in and dropped from inclusion.

The G&A Institute team in carefully tracking the increasing embrace of sustainability by US companies, and the reporting on the "sustainability journey" by these large-cap public companies began analyzing the S&P 500 companies' disclosure and structured reporting on sustainability (and related terms, such as corporate responsibility, environmental update, corporate citizenship, and others).

Our first analysis was shared publicly in 2011, for the results of year 2010 company reporting.  We found that just about 20% or one-in-five of the S&P 500 universe was publishing a sustainability report in some form.  That became our baseline.  The 2012 reporting analysis revealed a dramatic increase -- more than half of the companies were then reporting (the tally was 53%). 

The number increased considerably in 2013 to 73% and then 75% the following year.  By 2015 the tally was 81% (eight of 10 companies in the index) and now we have year 2016 results -- holding steady at 82%.  We share the news broadly in our Flash Report at the conclusion of the analysis -- that's our Top Story for you this week.

Our analysis includes identifying GICS sector reporting (financials, health care, energy, etc.), and the increase year-to-year where that occurs within a sector.  

G&A's EVP Louis Coppola has been the architect of the S&P 500 analysis, with the careful analytical work done by successive teams of outstanding intern-analysts over the years.  This year's team includes Alvis Yuen, team leader who has worked on the annual analysis for several years now; and team members Amanda Hoster, Elizabeth Peterson, Juliet Russell, Alan Stautz, Yangshengjing "UB" Qiu, and Olivia (Sihui) Wang.  We thank these outstanding professionals for their dedication and hard work completing the analysis.

The investment community takes a close look at the G&A Institute research and each year reaches out to the non-reporters (a shrinking base, we're happy to say) for engagement, and often, targets for filing shareholder resolutions to encourage the start of reporting on the corporate sustainability efforts. (In many cases for the holdouts, there are no such efforts underway -- and so, no reports!)

You'll find more details about the 2017 work (examining 2016 reporting results) in our Flash Report.  Do send us an email if you have questions about the exercise if you would like to have more information. 

Top Stories This Week...

FLASH REPORT: 82% of the S&P 500 Companies Published Corporate Sustainability Reports in 2016   
(Wednesday - May 31, 2017) 
Source: Governance & Accountability Institute, Inc.  - In the sixth annual monitoring and analysis of S&P 500 Index® company sustainability reporting, just completed by the Governance & Accountability Institute research team, the findings are that eighty-two percent (82%) of the companies included in this important investment benchmark published a sustainability or corporate responsibility report in the year 2016.

The S&P Index is one of the most widely-followed barometers of the US economy, and conditions for large-cap public companies in the capital markets.

To put this in context, in charting prior years reporting, G&A found that:

  • in the year 2011, just under 20% of S&P 500 companies had reported on their sustainability, corporate social responsibility, ESG performance and related topics & issues;
  • 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;
  • in 2015, 81% of the total companies were reporting;
  • in 2016, 82% signals a steady embrace by large-cap companies of sustainability reporting.

And also this week...the sad news about the United States abandoning the Paris COP 21 Accord...from the Washington Post's Team of Skilled Reporters...

Trump announces US will exit Paris climate deal, sparking criticism at home and abroad   
(Friday - June 02, 2017) 
Source: Washington Post - President Trump announced Thursday afternoon that he is withdrawing the United States from the landmark Paris climate agreement, an extraordinary move that dismayed America’s allies and set back the global effort to address the... 

Important Items for Your Attention: Editors' Sustainability Scans - Progress!

Sustainability grows as a priority in sport   
(Wednesday - May 31, 2017) 
Source: The DePaulia - Sustainability practices in professional sports often go unnoticed, but this year FOX Sports University is trying to change that. They are working with 38 different colleges to give students a marketing, research, or strategy... 

The New Age of Corporate Social Responsibility    
(Wednesday - May 31, 2017) 
Source: Tass_ Russian News Agencies - In recent years, the international business community has made great progress in corporate social responsibility (CSR) through innovation and implementation of global sustainable development goals (SDGs). Russian companies are... 

The Food Sustainability Index: Fostering the Global Shift Towards a More Sustainable Food System   
(Thursday - June 01, 2017) 
Source: FoodTank - A sustainable food system (SFS) has been defined by the U.N. Food and Agriculture Organization (FAO) as a food system that ensures food security and nutrition for all in such a way that the economic, social, and environmental...

Strengthening the Voice for Sustainability  
(Thursday - June 01, 2017) 
Source: American Libraries - One way to do this is by more proactively collecting and disseminating information to stakeholders involved in local sustainability efforts. 

Pasta sales rise thanks to health, sustainability issues   
(Friday - June 02, 2017) 
Source: Food Business News - Health and sustainability issues are driving pasta sales along with growth in key countries, according to data shared by The Nielsen Co. at a board meeting for the International Pasta Organization held May 29-30 in Uzwil, Switzerland.

But There is Still Much Work For Us To Do!

5 Sustainability Threats Facing Fashion   
(Tuesday - May 30, 2017) 
Source: Business of Fashion - It’s 2050. The Arctic Circle, Earth’s once-pristine white snowcap, is now green. Its melting snowdrifts have been replaced with an irrepressible moss. Just south, across the formerly barren landscape of... 

The Art of Modern Sustainability Communications: How to Embrace an Audience-First Approach   
(Tuesday - May 30, 2017) 
Source: Sustainable Brands - Recent research clearly indicates that today’s stakeholders expect more from companies — they want to purchase from and work for companies that champion sustainability. This shift in attitude is dramatically altering the way that..

Sustainable business at a crossroads, again   
(Wednesday - May 31, 2017) 
Source: GreenBiz - MIT SMR’s latest report, "Corporate Sustainability at a Crossroads," shows that most businesses have yet to crack the sustainability code. And now, after our eight annual surveys of tens of thousands of managers and more than 150... 

Stock Price Synchronicity and Material Sustainability Information   
(Thursday - June 01, 2017) 
Source: Harvard - This paper seeks to understand and provide evidence on the characteristics of emerging accounting standards for sustainability information. Given that a large number of institutional investors seek sustainability data and have... 

The 9 (or 10) keys to successful sustainability leadership   
(Friday - June 02, 2017) 
Source: GreenBiz - As the first chief sustainability officer of Owens Corning, and one of the first in the world, I’ve seen many things work really well — and many things not so well — and I’ve been fortunate to learn from generous mentors and... 

Our Focus This Week on A Range of ESG Topics & Issues -- Things to Think About..

100 Practical Ways to Reverse Climate Change   
(Tuesday - May 30, 2017) 
Source: National Geographic - At a time when the science of global warming is under attack and many people complain of climate change fatigue, some cheering news occurred last month: A book about climate change became a New York Times bestseller in its first... 

OPEC Can Cut Production But Fracking Controls The Oil Price Now   
 (Wednesday - May 31, 2017) 
Source: Forbes - The Organisation of Petroleum Exporting Countries, Opec, has agreed to maintain their production cuts for the purpose of supporting the oil price. 

Who’s Taking Responsibility for Your Supply Chain?   
(Wednesday - May 31, 2017) 
Source: Industry Week - He never had to face down shareholders and customers demanding that his company establish sustainability goals and then regularly report on their progress toward reaching those goals. F

Should ESG Investments Be the Core of a Portfolio?   
(Thursday - June 01, 2017) 
Source: Wealth Management - As environmental, social and governance (ESG) investing becomes more mainstream, advisors must decide how to get the most out of it. 

Crude Oil Begins To Flow Through Controversial Dakota Access Pipeline   
(Friday - June 02, 2017) 
Source: NPR - Crude oil is now flowing through the Dakota Access Pipeline, despite months of protests against it by Native American tribes and environmental groups. 

News & Opinion: Asset Managers, US Pension Funds, Sovereign Wealth Funds

Fed Survey Shows Modest Growth With Tight Labor and Tame Prices
(Thursday - June 01, 2017) 
Source: Bloomberg - The U.S. economy continued to grow “modestly” or “moderately” in nearly all regions in recent weeks, though new signs appeared that optimism has waned in some districts, a Federal Reserve survey showed.

CalPERS: Is It Melting Down'">CalPERS: Is It Melting Down'   
(Friday - May 26, 2017) Associated Profiles : California Public Employees’ Retirement System (CalPERS) 
Source: City Watch LA - Ever since Anne Stausboll suddenly announced her retirement effective August 2016, I have wondered what’s going on with CalPERS. She was seemingly at the peak of her powers running the pension giant, and there was.

Singapore fines Credit Suisse, local bank in 1MDB inquiry   
(Wednesday - May 31, 2017) Associated Profiles : 1Malaysia Development Berhad (1MDB, formerly known as Terengganu Investment Authority) 
Source: efe.com - for breaching anti-money laundering rules for transactions linked to Malaysia's scandal-ridden state fund 1Malaysia Development Berhad (1MDB). 

Dow races to new record   
(Friday - June 02, 2017) 
Source: CNN Money - While many American were focused on the fallout from President Trump's decision to withdraw from the climate deal, market analysts said Thursday's march higher on Wall Street was linked to healthy signals from the U.S. economy. 

News for You From the Corporate Sector

Coors Brewing launches EveryOneCan to support sustainability   
(Tuesday - May 30, 2017) 
Source: Click On Detroit - Coors Brewing has launched a new initiative in support of sustainability. EveryOneCan has partnered with organizations such as TerraCycle to help reduce the brewer’s impact on the environment. 

Most Chipotle restaurants hacked with credit card stealing malware   
(Tuesday - May 30, 2017) 
Source: CNN - A cybersecurity attack that hit most Chipotle restaurants allowed hackers to steal credit card information from customers, the burrito chain confirmed...

Key Interview: DuPont Highlight Sustainability Goals for Whole Value Chain   
(Wednesday - May 31, 2017) 
Source: Food Ingredients - Sustainability Leader at DuPont Nutrition & Health (N&H), Dr Mikkel Thrane has a PhD in Life Cycle Assessment (LCA) of seafood products and a Master of Science degree in Environmental Management. 

How science-based targets guide Walmart's sustainability course   
(Wednesday - May 31, 2017) 
Source: GreenBiz - Walmart is the first retailer to sign up for approved science-based targets around emissions reductions, said Kathleen McLaughlin, senior vice president and chief sustainability officer for Walmart Stores.

Union Pacific’s Sustainability Progress Spotlighted in 2016 Building America Report    
(Thursday - June 01, 2017) 
Source: Union Pacific - Union Pacific's 2016 Building America Report, published today, details its safety, social, economic and environmental progress. The annual sustainability report highlights Union Pacific was the safest U.S. railroad for the second... 

Trump Administration News... Affecting Directions on Governance, Sustainability & Climate Change

A Budget in Search of a Soul   
(Tuesday - May 30, 2017) 
Source: Larry Checco - featured commentator - Life begins, it does not end at birth. Someone needs to pass that memo on to those socially conservative right-to-lifers who at the same time endorse the Trump Administration’s latest Federal Fiscal Year budget proposal...

US companies no longer know rules of game under Trump, Hasbro director says   
(Tuesday - May 30, 2017) 
Source: Reuters - Confusion surrounding the trade policies of US President Donald Trump's administration means U.S. companies no longer know the rules of the game, a board member and former CEO of toymaker Hasbro told an international..


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