Corporate transparency is critical to building trust among key stakeholders. While many corporations are working to improve their sustainability reporting, there is still a broad spectrum of transparency when it comes to disclosure. To help companies and other financial market participants understand and address this issue, S&P Global Sustainable1 has launched a new “Disclosure Analysis” feature.
Now available on the S&P Global Capital IQ Pro platform and ESG Scores website, the Disclosure Analysis tool provides corporates and their key stakeholders with deeper insights on the company’s S&P Global ESG Score. Powered by the Corporate Sustainability Assessment (CSA), S&P Global ESG Scores help to paint a more holistic picture of an organization’s sustainability performance.
Data and information are collected and analyzed from the public domain, as well as directly from companies participating in the CSA. Approximately one-third of the questions in the CSA are referred to as “Requiring Public Disclosure” and the rest are identified as “Additional Disclosures.” While responses to questions marked as Additional Disclosure are not required, doing so as well as providing supporting documentation via the CSA that may not be readily available in the public domain, enables a more comprehensive and relevant CSA analysis.
HOW IT WORKS
The Disclosure Analysis chart provides an at-a-glance view of an organization’s S&P Global ESG Score from the perspective of its corporate disclosure practices. In the below example, questions in the CSA that require public disclosure are depicted by the length of the blue bars and account for 38 of the maximum 100 points that the company can achieve in its industry. The length of the black and gray bars represents the remaining questions that do not require publicly available information, but where additional disclosures were made available publicly or provided directly by the organization. Here, the company received 13 of the possible 62 points it could have scored for Additional Disclosures. Both scores combine for a total of 32 out of 100 points.
*This Disclosure Analysis chart is illustrative and does not reflect any specific company’s results.
The “Potential Score Contribution” describes the maximum overall score a company could have achieved if all disclosed information met the requirements of the CSA methodology resulting in a score of 100 for each question. If all disclosed information was relevant to the CSA and resulted in the highest possible score in each question, this company could have scored a maximum of 64. Given that it scored a 32, the 32-point gap may be attributed to the organization’s sustainability performance rather than a lack of disclosures on the topics covered in the CSA.
Additionally, companies receive an aggregate disclosure level relative to their industry peers under “Data Availability” in the Disclosure Analysis. Disclosure levels include: Very Low, Low, Medium, High and Very High. Finally, the “Disclosure Level” reflects the percentage of questions in the CSA that required public disclosure compared to those that did not.
For questions, please contact the CSA Corporate Engagement team at email@example.com.