European companies are leading the rest of the world in their disclosure of corporate and social responsibility practices, a study has found.
The study, by S&P Dow Jones Indices and RobecoSAM, looked at the sustainability and transparency reporting practices among 1,500 of the world’s largest organisations.
Corporate social responsibility is an increasingly business-critical theme for global companies, as levels of disclosure are key in allowing markets and investors to make an accurate judgement of an organisation’s exposure to risk.
The study found that organisations in S&P Europe 350 had the highest average Sustainability Transparency and Disclosure Score (ST&D) Score, and of the top 10 ranking countries on a global level, nine were European with Portugal, Spain and Denmark in the lead. The UK ranked 11th.
However, developed economies fared only marginally better than emerging economies overall. Indian companies for example scored an ST&D which is closer to the top range for indices.
Companies are twice as likely to disclose on corporate governance issues as they are on environmental or social issues – and a company’s decision to disclose information about corporate governance is independent of its levels of transparency on social or environmental aspects of its business.
There is strong correlation between a company’s membership in the Dow Jones Sustainability Index and its ST&D score. As only the best-in-class companies, in terms of overall sustainability are included in the DJSI, this finding implies that companies are more inclined to disclose non-financial information about business activity when they have significant achievements in this area.
Bigger companies tend to disclose more information because they experience higher pressure from their shareholders and governments.
Unilever, Kingfisher, and Nestle fared particularly well – all registering scores of 90+.
