Ethical Performance
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US reporters beginning to make up for lost time

September 2006

The largest publicly owned companies in the US have grown more willing to disclose details of their social and environmental performance, a study by the investment researcher KLD has found.

More than two-fifths (43 per cent) of the companies in the S&P 100 index now issue annual corporate responsibility reports. This represents a net increase of four companies since last year.

Of those that report, a dozen are doing so for the first time, among them Cisco Systems, General Electric, Time Warner and Wells Fargo. KLD says the increase would have been greater had a number of existing reporters not left the index.

The study points to increased investor pressure as a main reason for the growth in non-financial reporting. During the last financial year, for example, institutional investors filed 19 shareholder proposals urging companies to issue performance-based sustainability reports. ‘We’re now seeing many of the top US companies step up to the plate and respond to institutional investors’ demands for greater transparency,’ said Eric Fernald, KLD’s research director.

A separate new study by the UK consultancy Context suggests that 59 of the top US companies by market capitalization now produce a corporate responsibility report. This compares with 91 of the 100 largest UK-listed companies and 61 in the rest of the world.

Context’s study, which is based on data supplied by, shows that while seven in ten European reporters use external assurance to validate their reports, this remains ‘very rare’ in the US (see graph). US companies produce shorter non-financial reports, averaging 44 pages compared with 72 pages in Europe.

Despite the greater popularity of non-financial reporting in Europe, the average reporting company does not have much more experience in the field than its counterparts in the US. The study found that those US companies to have entered the field have on average produced five reports each, compared with six by those in Europe. Context says this reflects the fact that US companies began reporting at the same time as those in Europe, but the lead was more enthusiastically taken up in Europe than in the US.

Another trend highlighted by the KLD study is the shift to greater online disclosure. More than three in four (79 per cent) in the S&P 100 Index provide information online about their social and environmental policies and practices, compared with 59 per cent last year.

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