The JUST Report: Investors Need ESG Disclosure – And the Public Wants It Too
SEC Chair Gary Gensler has made it clear that the commission is prioritizing ESG with an immediate focus on the “E”. As he wrote in a Twitter thread earlier this week, “Why is the SEC looking at climate risk disclosure? Simple: Because investors need it.”
We’ve written here recently about how and why some of the world’s largest investors will be holding companies to account on robust ESG metrics this year, but we have also found that the American public is also in support.
According to a new polling report from JUST and our polling partner SSRS, in collaboration with Public Citizen and Ceres, we found that “90% of Americans say it is important that there is a common, standardized reporting structure for companies,” and that “an average of 87% support the federal government requiring corporate disclosure on human capital and environmental impact data, making performance comparable across companies and/or industries.” JUST’s Chief Strategy Officer Alison Omens joined CNBC’s Squawk Box to discuss some of the more surprising details.
Aleksandra Radeva, a JUST analyst, wrote a piece this week shedding light on just how difficult it can be to make sense of the data currently available on workers in particular. Not only does a minority of America’s largest companies report on human capital in any kind of meaningful way, the data is hard to both find and compare.
Double entry accounting has had over 700 years to evolve, so we shouldn’t expect ESG measurement to be perfected overnight. Unfortunately, however, we don’t have that much time. Standardized metrics on material ESG issues are essential if the market is to understand how a company’s bottom line may be affected, immediately and over the long term. As Gensler said, “It’s essential we get this right.”
This Week in Stakeholder Capitalism
Apple boosts its retail worker pay up to 10% to retain talent in a tight labor market.
Citigroup exceeds the goals it set for increasing the percentage of women and Black executives at the firm.
Kroger receives a deep dive from The New York Times showing how many workers are struggling to get by and on government assistance despite record profits and one of the highest CEO-to-worker pay ratios in its industry.
Netflix announces that over 50% of its employees now come from underrepresented groups throughout the U.S.
Salesforce commits to tying executive pay to several ESG goals.
What’s Happening at JUST
The Wall Street Journal cites insights from our State of Human Capital Disclosure Report – “Of the 100 largest employers in the U.S., 58% don’t disclose the salaries and benefits paid to their workforce, 85% don’t disclose turnover and 97% don’t disclose promotion rates” showing how far companies need to catch up to meet increasing demands from investors and potentially, the SEC. Another JUST report shows how long it took us to collect and clean the non standardized workforce data.
If you’ve read our new ESG disclosure poll, and are interested in taking a look at more detailed demographic slices of the data (e.g. by political ideology, age, race/ethnicity, geographic location) we’ve got you covered. Download the detailed Survey Report here.
Alison Omens joined CNBC Squawk Box to discuss the findings in our ESG polling report, and Triple Pundit highlights the corporate racial equity disclosures from our latest EEO-1 report.
Invest in a JUST Future
Tracking human capital data disclosure is just one way we’re working to define, align, and drive action on the “S” in ESG. With your support, we can expand our critical insights and analysis beyond the country’s 100 largest employers to incentivize corporate America to step up for workers. Make a gift today.
“What I saw in that factory I bought [was] that a large corporation left and left behind people that worked in that factory for 70 years, so many generations, left the junk plan and left an environment that was damaged for years, with no one from the high tower to say goodbye. When I grabbed a few of those people and said: ‘What if we can turn this around and make this completely different?’…I bet on those people and have made the impossible possible.”
- Hamdi Ulukaya, CEO of Chobani, speaking on Fortune’s Leadership Next podcast on building the company with the value of taking care of your employees.
“Companies that make public climate pledges have a responsibility to transparently disclose the information that can back up those declared ambitions. Currently, the quality of disclosure is highly variable; information is often missing, inconsistent or fragmented. Even companies that are doing relatively well are sometimes exaggerating their ambition.”
- Sybrig Smit, Climate Policy Analyst at NewClimate Institute, on a core finding from the organization’s recently published Corporate Climate Responsibility Monitor.
“CEOs make these wonderful flowery statements about people being their greatest assets. Why aren’t people on the balance sheet if they are the most important asset?”
- Jeff Higgins, CEO of the Human Capital Management Institute, speaking to the WSJ about investors struggling to find human capital data.
Must-Reads of the Week
MarketWatch reports that Sens. Mark Warner and Sherrod Brown are urging the SEC to require companies to disclose gig workers and other contractors as part of new rules relating to human capital.
Axios reports women’s labor force participation is still lagging behind men’s and Bloombergshines a light on the widening female executive pay gap, which has increased to 25%, the biggest gulf since 2012.
CEO Daily reports on the YOY increase of shareholder proposals that are pushing major companies to reveal various ESG disclosures.
Despite the surge in ESG investing, a new study from The Harris Poll and Nasdaq shows that currently, only 23% of investors align their investments to their values.
In his latest editorial for The Financial Times, former BlackRock exec Tariq Fancy argues that stakeholder capitalism depends on corporations giving full disclosure to investors.
Chart of the Week
This chart comes from our latest ESG polling piece, and reveals that support for corporate disclosure requirements is strong across the political spectrum. 86% of Republicans, 98% of Democrats and 88% of Independents agree it is important for ESG data to be reported in a common, standardized way. And even on climate, traditionally a more partisan topic, 87% support for the federal government to require large companies to report their climate metrics (74% Republican, 97% Democrat, 87% Independent).