According to White & Case based on its review and analysis of 84 small-cap and mid-cap (between $500 million - $10 billion) companies' website disclosures, 29 companies (nearly 35%) provided website sustainability disclosure and 11 companies (13%) posted a standalone sustainability report on their website.
Key disclosure trends include:
- Industry - Of five industries represented - Energy, Life Sciences, Retail, Services, and Technology - disclosure was most prevalent among Energy sector companies. 11 of the 14 energy companies (~78%) had sustainability pages on their websites, and seven of the 14 posted a standalone sustainability report on their websites.
- Market Cap - Disclosure was more prevalent among companies with higher market caps, as shown here:
- Structure - Based on the 15 companies that were either controlled or dual class, sustainability disclosure was much more prevalent among companies that were widely held by institutional investors than controlled or dual class companies.
- Company lifecycle - More mature companies were much more likely to provide sustainability disclosure than less mature companies. 62% of companies that had been public for over 10 years provided disclosure vs. 21% of companies that had been public for three years or less.
- Among the 29 companies that provided website sustainability disclosure, the most common types of disclosure were: (i) environmental (22 companies), (ii) human capital management (19 companies), and (iii) health & safety (16 companies). The report includes sample disclosures representing each of these categories.
- Of the 11 companies with standalone sustainability reports, ten disclosed the sustainability reporting standards that they used (typically in part) or consulted to inform their disclosure, with the most commonly referenced being the GRI and SASB standards.
Among other instructive takeaways, the firm advises companies considering E&S/sustainability disclosure to: (i) identify and assess their key risks, opportunities and priorities before deciding what information to voluntarily disclose; (ii) understand and be responsive to investor wants/needs; (iii) assemble an internal team with representation from multiple function areas to determine the content and sources of information, and to review any proposed disclosure; and (iv) implement appropriate controls to process, summarize, assess, and review the accuracy of all disclosures with the same level of diligence as is conducted for the company's financial disclosures.
See our prior report: "Large Companies: E&S Disclosure Benchmarking"; IR Magazine's "How to upgrade your ESG communications"; and numerous additional resources on our Sustainability/ESG page. This post first appeared in the weekly Society Alert!