Appendix B
This paper pursues two separate but fundamentally
related lines of inquiry. The first section is concerned
with measuring corporate sustainability disclosure on
the world’s stock exchanges. In the second section, an
inventory of specific policy instruments is assembled,
with a view to determining which policies are
correlated with superior disclosure practices.
In this chapter we provide a detailed overview
of the methodology used to guide our analysis.
Methodological transparency is an essential quality
in efforts to measure or rank actors based on a
concept as complex—and potentially nebulous—as
corporate sustainability disclosure.
Part I: Measuring Sustainability Disclosure on
the World’s Stock Exchanges
The methodology in this year’s paper is effectively a
reproduction of the approach we used in last year’s
study, which was released at the Rio+20 Conference
in June 2012.
Unit of analysis:
The unit of analysis consists of an
individual stock exchange.
Analytical scope:
The analytical scope is described
along five dimensions:
• Companies:
Analysis is constrained to include only
‘large’ publicly traded (e.g., listed) companies.
A total of 3,972 companies were considered in
the study.
• Stock exchanges:
Analysis is constrained to include
only large exchanges.
A total of 45 exchanges
were considered in the study.
56 Last year’s report, entitled “Trends in Sustainability Disclosure:
Benchmarking the World’s Composite Stock Exchanges,” can be downloaded
at this link:
57 This represents a slight but significant change from our 2012 report, where
the unit of analysis was a composite stock exchange.
58 Defined as companies that had a market capitalization
in excess of US$2 billion as of December 31, 2011.
59 The universe of stock exchanges comprised in our study is determined by
considering all stock exchanges that had at least 10 actively traded large
companies as of December 31 in any three of the five years covered by this
study (i.e., 2007 – 2011). In our 2012 report, the criterion was at least 10
actively traded large companies as of December 31, 2010.
• Sustainability indicators:
Analysis is constrained
to include only the seven “first generation”
sustainability indicators, as shown below.
• Study period:
The project uses a performance
year study period of 2007 – 2011.
• Geography:
No constraints employed; the project’s
analytical boundary consists of all large publicly
traded companies, irrespective of the location of
their headquarters or the exchange on which their
shares trade.
Data source: The paper’s analysis was based on data pulled from
Bloomberg’s ESG database on July 2, 2013.
Ranking model:
As in our 2012 report, stock
exchanges are ranked on three measures: i) the
proportion of their large listings that disclosed each
first generation indicator in performance year 2011
(50% weight); ii) the growth rate in the proportion
of their large listings that disclosed each indicator
over the 2007 – 2011 period (20% weight); and iii)
the timeliness with which large companies disclose
their sustainability data (30% weight).
60 Performance year refers to the year to which a company’s sustainability data
corresponds. For instance, most companies disclosed their 2011 performance
year sustainability data at varying points in calendar year 2012.
61 The data pull consisted of the following steps: for each company in the
project’s analytical boundary (n=3,972), disclosure of the first generation
indicators (n=7) was pulled for each year during the 2007 – 2011 window.
Companies were then aggregated into analytical buckets based on their
primary stock exchange.
62 This refers to the gap between the end of a company’s performance year and
the date on which the data are publicly disclosed.
injury rate
Source: CK Capital, Bloomberg
The Seven First Generation
Sustainability Indicators
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