While the GRI and other organizations have
found the global financial services sector to
be a high reporting sector, it is the weakest
sector globally on the seven first generation
sustainability indicators.
Sustainability disclosure is mostly a large-
company phenomenon, although considerable
reporting gaps exist even among large companies
A well-known large-cap bias is said to exist with
sustainability disclosures and we find concrete
evidence of this trend insofar as the seven first
generation indicators are concerned.
Of the 60,682 publicly traded companies in our
starting analytical universe, 3,972 (7%) can be
designated as large and 56,710 (93%) as small
using our standard threshold of US$2 billion in
market capitalization.
This distribution pattern
is effectively the same as the one we encountered
in last year’s study, and it underscores how the
vast majority of the world’s listed companies are
small or micro-caps.
Of the large companies surveyed, 2,737 (69%)
disclosed at least one of the seven first generation
sustainability indicators in 2011, and 117 (3%)
disclosed all of the indicators. Of the small companies
in our study, only 4,216 (7%) disclosed at least one
of the seven first generation sustainability indicators
in 2011, and only 20 (0.04%) disclosed all seven
25 This is the same threshold that we used in our
2012 report.
These data plainly show how large companies are
nearly 10 times more likely than small companies
to engage in quantitative sustainability reporting,
using the seven first generation indicators as a
yardstick. Small and micro-caps are effectively
absent in the world of first generation sustainability
reporting. While small firms typically have fewer
resources than their large company counterparts
to channel to non-core activities, the sustainability
footprint of the world’s ~57,000 small public
companies is far from non-trivial. While taking
into consideration the resource constraints facing
small firms, policymakers may want to explore new
and innovative ways to incentivize (or mandate)
the participation of these firms in the realm
of sustainability disclosure and sustainability
management in general.
All of this is
to suggest that the reporting practices
of the world’s large companies are somehow beyond
improvement, or even sufficiently expansive. As
mentioned above, despite today’s environment of
heightened corporate awareness about the benefits
of sustainability disclosure, and the modest but
consistent proliferation of policy instruments that
encourage (or mandate) sustainability reporting,
only 3% of the world’s large companies (117 out of
3,972) currently offer their stakeholders complete
first generation sustainability reporting. This is a
decidedly sub-optimal state of affairs for investors,
community groups, employees and other company
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