We have generally found that every company in the report has some sort of sustainability reporting. Often vast sections on CSR (Corporate social responsibility) and corporate sustainability can be found on their websites. Regardless of how comprehensive these reports are, in most countries corporations are forced or at least expected to issue sustainability reporting. Often driven by stock exchanges and regulatory bodies.
Also materiality of those reports is often questionable, as is its supervision from the executive branch and/or board of directors.
The good news is that over half of all companies do in fact have a dedicated sustainability board committee. US firms are leading the pack with 71% of them featuring a sustainability, CSR or ESG (Environmental, Social and Governance) committee. There is, however, a clear need for Asian countries like China and Japan to catch up. Only 22% and 25%, respectively, of their featured companies have a relevant board committee.
Although Europe is performing slightly above average, there is still some work to do. For example, Germany (6 companies), does not feature a single dedicated board committee, whereas Swiss companies (although only featuring 4 companies) are all showcasing comprehensive board policy on sustainability.
Russia (4 companies) features two large oil & gas firms that do not have any sustainability board commitment, although this is very material for extractive businesses. Its industry counterparts in the rest of the world are doing much better.
We have also found marked differences in the formulation and comprehensiveness of board committee charters. One can almost tell the dedication to sustainability by reading those charters or proxy statements.
Although we identified a fairly large number of directors (232) who all have formal membership in a sustainability committee, we found that really 36 of them really stand out as knowledgeable, determined or experienced in the sustainability or ESG topic.
Our final takeaway is the importance of female representation on relevant committees. Women have most of the relevant credentials, representing 64% of relevant directors. They are clearly driving the discussion and ownership of sustainability policy. This number is even more impressive when considering that women only make up 37% of all identified directors.