Chart of the Week: Real Action on the Environment – Not Just Disclosure – Is Needed for Top Financial Performance

Earlier this week, the United States Government Accountability Office published a report suggesting that the Trump administration systematically reduced estimates of the social costs of carbon against the recommendations of scientists. Even though there is an ambitious investment plan for fighting climate change from President Trump’s Democratic opponent, Joe Biden, much of the onus to fight climate change in the U.S. is still on the private sector.

In previous Charts of the Week, we showed that a lower carbon footprint can be beneficial for a company’s bottom line, both in terms of stock returns and in terms of operating income. This week, we take a closer look at the impacts of disclosure versus non-disclosure.

To run this analysis, we looked at the greenhouse gas (GHG) intensity – the amount of GHG emissions per dollar of revenue – of our ranked companies relative to their respective industries. We then compared the performance of the top quintile to the bottom quintile, as well as to those companies that do not disclose their emissions. We found that the top quintile outperforms the non-disclosers by 4.0%, whereas the bottom quintile underperforms the non-disclosers by 8.5% (both relative to the respective industries). That means that companies that disclose their GHG intensity and do the least damage to the environment are indeed top performers, but the companies that don’t disclose their GHG intensity aren’t among the worst performers.


The result might seem baffling at first, but makes sense: At this point, large polluters in certain sectors are required to disclose their emissions. As a result, not all companies that disclose (parts of their) GHG emissions actually aim at decreasing them. This means that disclosure in itself is not a sufficient explanation for the outperformance that we have seen in carbon-efficient companies. To reap the benefits, companies need to actively engage with their operations and supply chain.

We will explore the topic of climate disclosure and performance in more detail in an upcoming spotlight on environmental issues.

If you are interested in supporting our mission, we are happy to discuss data needs, index licensing, and other ways we can partner. Please reach out to our Director of Business Development, Charlie Mahoney, at to discuss how we can create a more JUST economy together.

If you have questions concerning the underlying analysis, please reach out to our Senior Manager for Quantitative Research, Steffen Bixby, PhD, at

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