Global analytic survey finds most Dow-listed companies failing to match scores of international firms
While U.S. companies in the Dow Jones Industrial Average (DJIA) are global leaders in many respects, a new analysis suggests that’s not the case when it comes to ESG transparency.
According to an analytic survey of non-financial reporting performance conducted by Global ESG Monitor, 19 out of 30 U.S. companies in the DJIA fell within the bottom 50% of 140 companies examined worldwide.
The GEM survey looked at publicly reported data of those 140 companies, which are listed on leading indices such as Germany’s DAX, Europe’s EURO STOXX 50, the DJIA in the U.S., and the S&P/ASX-50 in Australia. The information analyzed was derived from 85 annual reports that integrated ESG data, as well as 100 stand-alone independent sustainability reports that the companies published.
The majority of American companies surveyed failed to match top scores of international firms that were listed on leading indices in the U.S., Germany, Europe, and Australia.
Bringing up the rear among Dow-listed companies was Microsoft; based on quality evaluation criteria such as transparency, comparability, and reliability, the tech giant’s independent sustainability report scored just three points.
Aside from Microsoft, the bottom five rankings were occupied by three other U.S. companies including McDonald’s, JP Morgan Chase, and Honeywell, which tied with Microsoft for last place.
Among Dow Jones companies, Walgreens emerged as the highest-ranking firm, with a GEM rating of 45 out of 66 possible points for its stand-alone ESG report. Intel followed as a close second, with a score of 42.
“We don't know what these companies are doing on sustainability because they have dismal reporting transparency,” said Michael Diegelmann, CEO of German investor relations and ESG consultancy cometis and GEM partner. “Data shows companies that prioritize non-financial ESG goals can outperform their peers financially.”
According to Diegelmann, the basic details that public corporations choose to report, as well as how and where they report it, are too often omitted from official ESG documents used by investors. That creates a lack of comparability that makes it nearly impossible for stakeholders to make an accurate determination of what’s happening at companies.
“By measuring and comparing sustainability reporting, we want to ensure more transparency,” said Ariane Hofstetter, CEO of research institute KOHORTEN which led the analysis and designed the study. “Only through transparency can global sustainability goals be achieved.”
