Which Companies Have the Most Open Records for ESG Reporting?

Corporate disclosure of environmental, social, and governance (ESG) issues is voluntary but also uneven, says a study by the University of Chicago’s Booth School of Business. The report is aimed at spotlighting what is disclosed and which industries reveal the most.

Who has the best record of disclosing minority and female employment? What about polluting? And injuries on the job?

No doubt, ESG investing is becoming a big deal in corporate America and the financial establishment that supports it. At the end of 2019, some $17.1 trillion, about one-third of all assets under management (AUM) in the US, was managed using a sustainable investment strategy, according to the US SIF Foundation, a 42% increase from two years prior.

In 2021’s first quarter, a net $21.5 billion flowed into mutual funds and exchange-traded funds (ETFs) that employ ESG screens or are oriented toward sustainability, by the count of research firm Morningstar.

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“Transparency is important, and it is improving,” said Shirley Lu, a researcher on the project, which was put together by Booth’s Rustandy Center for Social Sector Innovation.

Who issues a corporate social responsibility (CSR) report? The larger the company, the more likely it is to release one. For the highest revenue group ($26 billion and above), 82% did a CSR. For the lowest bunch revenue-wise ($857 million and below), the figure was 44%, about half the level of the largest businesses. In fiscal 2017, 327 members of the index put out such a report.

When it comes to female and minority employees in the S&P 500, the share hovers around a third. In diversity terms, the number of female employees was reported the most, with around 200 companies disclosing the percent of female employees in their labor force. For minorities, it was about 150. The industry with the most female employees was retail (62%) and the industry with the most minorities was apparel (56%).

On the environmental front, industries with the largest negative impact disclosed the most. Almost all tobacco, chemical, and automobile companies issued CSRs.

The report said 169 companies reported workplace safety, and reporting fatalities was much lower, at 81 companies. Which industry had the highest amount of safety incidents? Retail. The lowest? Computers.

The biggest greenhouse gas emissions were—no surprise—the oil and gas segment, followed by utilities and then transportation. They issued the most reports, perhaps because they are under scrutiny from government regulators and green-oriented politicians, not to mention younger folks, who tend to have a greater ESG mindset than their elders.

The industry with the least greenhouse gas disclosure: insurance, a sector not known for its smokestacks.

Water consumption was the most disclosed ESG metric, with 150 companies reporting. Turns out that the biggest water users were oil and gas, utilities, and chemical companies.

The study involved a lot of variables. But in seven out of the nine CSR categories, there was at least one metric that more than 100 companies disclosed in a comparable way.

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Tags: corporate social responsibility, CSR, Diversity, ESG, Greenhouse Gas Emissions, Rustandy Center for Social Sector Innovation, safety, University of Chicago’s Booth School of Business, water

Canada’s University Pension Plan (UPP), a new jointly sponsored pension plan serving Queen’s University, the University of Guelph, and the University of Toronto, launched July 1. The plan unites more than 35,000 members and five pension plans into a single administration with total assets of approximately C$10.5 billion (US$8.4 billion).

The three universities said they decided to combine their pension plans in order to reduce costs and improve efficiencies and investment opportunities. According to UPP’s backers, years of low interest rates, volatile investment markets, and rising life expectancies have led to funding shortfalls and increased contribution rates for university plans. They say the current model for single-employer plans is unsustainable, and combining multiple plans will allow universities to focus on providing education for students rather than diverting resources to managing their pension plans.

“UPP was born from the extraordinary efforts of the employees, administrators, and governors of our founding universities, all committed to strengthening defined benefit [DB] pensions,” Gale Rubenstein, chair of the UPP’s board of trustees, said in a statement. “We’re starting from a strong foundation with an outstanding board and leadership team that are guided by our members’ values and needs.”

The UPP is a DB pension plan that is based on its members’ best average earnings and the number of years of credited service earned after joining the UPP. Pension benefits earned under existing university pension plans will be preserved.

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At inception, the UPP pension for credited service earned after joining the UPP will be based on: 1.6% of average earnings below the average year’s maximum pensionable earnings (YMPE), multiplied by credited service, plus 2% of average earnings above the average YMPE, multiplied by credited service. Average earnings will be based on average earnings during the best 48 months of eligible employment, and average YMPE will be based on the average YMPE for the last 48 months of eligible employment. The YMPE for 2018 was C$55,900 (US$44,933).

For example if a participant has average earnings in the last 48 months of eligible employment of C$75,000, and 20 years of credited service earned after joining the UPP, the 48-month average YMPE is C$54,925. And, as is the case with all registered pension plans, the UPP pension benefit will be subject to the maximum pension limits under Canada’s Income Tax Act.

The new fund is being led by Barbara Zvan, president and CEO. She previously worked at the Ontario Teachers’ Pension Plan for 24 years.

Although the UPP will initially cover three universities, it will be open to other universities across the Canadian province of Ontario to join. The UPP follows the model of other multiemployer plans such as the Ontario Teachers’ Pension Plan and the Ontario Municipal Employees Retirement System (OMERS).