American businesses score 10 percent on social and environmental disclosure rate, compared with 19 percent globally.
Large US corporations are less transparent than big companies in other developed countries when it comes to disclosing social and environmental practices, according to a study by global business research organization the Conference Board. The disclosure rate for US companies is only 10 percent, compared with 19 percent for corporations sampled from all developed nations, according to the organization’s 2012 sustainability report.
The study also finds US companies are less likely to measure company-wide waste disposal, adopt climate change policies or disclose employee turnover rates. ‘In our sample of companies from around the globe, the percentage of Russell 1000 US companies offering disclosure across the full range of environmental, social and governance (ESG) practices is half the global average,’ says study co-author Matteo Tonello, managing director of corporate leadership at the Conference Board. ‘In part, progress has been slow because many companies cannot find the valuable quantitative comparisons that would help them measure their performance on these extra-financial activities.’ The sustainability report compares companies in the Russell 1000 US large-cap index and S&P 500 companies with a global sample of 3,000 companies in Bloomberg’s ESG database, mostly from Europe and Japan.
The corporations are measured for disclosure of 72 environmental and social practices, including labor standards, environmental impact, charity and biodiversity. The percentages in the overall rating reflect the number of policies the companies disclose. The report finds that 13 percent of the Russell 1000 companies have in place a process to measure energy consumption in a uniform manner, compared with 47 percent of companies in the Bloomberg global sampling. It also concludes that 12 percent of US companies report on water management, compared with 37 percent of companies worldwide.
The US also lags behind global counterparts in relation to minimizing company impact on climate change, with 16 percent adopting formal policies, compared with 37 percent of the global sampling. Turnover rates ‒ a measure of employee satisfaction ‒ is reported by only 4 percent of the Russell 1000 companies and 7 percent of corporations in the S&P 500, compared with 10 percent of the companies in Bloomberg’s global database, according to the Conference Board. The study, based on what the Conference Board calls ‘very small sub-samples of disclosing companies’, finds that US companies may be slightly behind the international average in placing ethnic minorities in management positions.
According to the data, 19 percent of Russell 1000 companies have ethnic minorities in management positions, compared with 20 percent in the global sampling. Only 2 percent of global companies ‒ and 3 percent of Russell 1000 companies ‒ disclose whether they have minorities in management spots.
US companies have a higher-than-average level of maintaining a business ethics policy, however: some 86 percent of companies in the Russell 1000, and 93 percent of the larger companies in the S&P 500, have internal written codes of ethics, the report finds. This beats the 80 percent reported from the global sampling of large companies.
This article originally appeared on the website of IR magazine, the sister publication of Corporate Secretary.
