The methodology that we have developed in
this report to measure corporate sustainability
disclosure and to guide the policy analysis is
comprehensive, clear and analytically rigorous.
However, it is not perfect. We highlight below
some elements that fall outside our study.
Large vs. medium exchanges
. While small exchanges,
defined in our study as those with less than 10 large
company listings,
are automatically excluded from
the ranking, all other exchanges are treated equally.
This means that the largest exchanges, such as the
New York Stock Exchange with 921 large company
listings, are put into the same analytical bucket as
medium sized exchanges, such as the Amsterdam
exchange (32 large company listings). While there
is no statistical relationship between the size of an
exchange and its performance in our ranking,
exchanges may face more structural challenges
than medium sized exchanges in operationalizing
sustainability disclosure requirements.
Exchange characteristics.
In our study, characteristics
such as ownership structure, or the degree of
autonomy that exchanges have to implement listing
requirements, are left unexamined.
Sector composition.
The sector composition of each
exchange’s large listings is not taken into account
in our ranking. Exchanges that are home to a
disproportionate share of companies in industries
known to have strong disclosure practices, such as
mining and energy companies, may be advantaged
in our ranking.
17 The report’s methodology is outlined in full in Appendix B.
18 The specific rule is that an exchange must have maintained a minimum of
10 large listings for a minimum of three years out of five in our study period
(2007 – 2011). A large company is defined as one with market capitalization
in excess of US$2 billion.
19 A scatter plot of exchange size (by number of listings) versus ranking score
showed no statistically significant relationship between the two variables.
Bloomberg data conventions.
All data is subject to
the data collection methodologies employed by
Bloomberg. For instance, in cases where a first-
time sustainability reporter discloses both current
and historical performance data simultaneously,
Bloomberg’s convention is to backfill the data.
In order to enhance the comparability of data,
Bloomberg discards a small but unspecified
number of data points that do not meet its quality
thresholds. While the merits of this practice are
obvious, it could cloud the analysis of specific
corporate reporting trends. It also means that
historical disclosure rates presented in this year’s
report may be marginally different than those
presented in the 2012 report.
Notwithstanding these limitations, our ranking
is based on a clear and objective set of criteria,
and we believe it allows for transparent
benchmarking of sustainability disclosure
across the world’s stock exchanges.
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