Global ESG Study Shows Miserable Environmental Transparency for Dow Jones Companies

ESG Progress slow via survey

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by | Mar 5, 2021

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Results of a new analytic survey published by Global ESG Monitor (GEM) showed that US companies in the Dow Jones Industrial Average (DJIA) generally had miserable scores in reporting their non-financial progress on Environmental, Social, and Governance (ESG) goals. Nineteen of the 30 Dow companies fell in the bottom 50% of the 140 companies analyzed worldwide showing little ESG progress.

Most American companies failed to match the top scores of international firms listed on leading indices in the US, Germany, Europe, and Australia. At the bottom of the Dow field was Microsoft’s independent sustainability report, which scored just 3 points based on quality-evaluation criteria such as transparency, comparability, and reliability. Four US companies in the bottom five rankings are:  McDonald’s and JP Morgan Chase, with Honeywell and Microsoft tied for last.

“If these were high school scale grades, only Walgreens would have passed for their stand-alone ESG report,” said David Fuscus, President of Xenophon Strategies, a Global ESG Monitor partner. “Twenty-three Dow companies would get an F, with scores so low that they might be held back a grade.”

Walgreens was the highest-ranking Dow company with a GEM Rating of 45 out of 66 points for stand-alone ESG reports followed by Intel with a score of 42.

The Global ESG Monitor looked exclusively at publicly reported data of 140 companies which are listed on leading indices including the DAX (Germany), EURO STOXX 50 (Europe), Dow Jones Industrial Average (USA), and S&P/ASX-50 (Australia). Information came from 85 annual reports that integrated ESG data, as well as 100 stand-alone independent sustainability reports published by the companies.

GEM’s research analysts are specialized in capital market reporting and used multiple research techniques as part of GEM ASSAY, a proprietary analysis method that includes data and quality-evaluation criteria that analyzes comprehensibility, transparency, measurability, comparability, timeliness, adequacy, and reliability. GEM ASSAY consists of 53 general and 490 industry-specific criteria, the latter of which were defined working with the “accounting metrics” of the Sustainability Accounting Standards Board (SASB). Other frameworks, like the Global Reporting Initiative (GRI) and the UN Sustainable Development Goals (SDGs), also informed the study criteria.

Among the key findings globally, only 27% provide any methodology and only 19% provide formulas, approaches or calculation methods on how ESG data was gathered. The study also reveals that only 35% of the reports demonstrated transparency when it came to unmet ESG objectives.

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