A recent White & Case report summarizes ESG disclosure trends of the top 50 Fortune 100 companies by revenue. It’s a good look at where disclosure is headed as all of the information was pulled from SEC filings, and it’s notable how much human capital and environmental disclosure was included in the filings. When comparing 2020 data to 2019, it’s important to note the effect of the COVID-19 pandemic and the current social climate, and how that has placed focus on companies’ management of ESG issues. Here’s some of the report’s highlights:
– In 2020, every company surveyed increased its ESG disclosures in at least one category in their proxy statements compared to 2019
– The largest increase in ESG disclosures came in human capital management, in fact 90% of the companies surveyed included some form of HCM disclosure in their 2020 Form 10-K or proxy statement, increasing 8% from 2019
– 29% of the 2020 filings increased their environmental disclosure from 2019, with a significant increase in the amount of quantitative disclosures, such as information on greenhouse gas emissions reductions and renewable energy use
– Other ESG categories on the rise in 2020 include company culture, ethical business practices, board oversight of E&S issues, social impact/community and E&S issues in shareholder engagement
The report provides a few things for companies to think about that includes beefing up disclosure on human capital management, environmental and board oversight of E&S issues — if companies haven’t already done so. One tricky issue for companies is deciding where to include ESG disclosures — in SEC filings or on company websites. The report says 84% of the companies surveyed referred readers to disclosure on the company’s website from their 10-K or proxy statement with an increasing number using their SEC filings to highlight for investors that enhanced ESG reporting is available on the company website.
-Lynn Jokela, TheCorporateCounsel.net August 26, 2020
