Growth & Innovation.

Martin Toner, MBA, CFA

We have updated our scoring of the G&I universe for 2021 data. Overall, the amount of disclosure and reporting has improved, and a number of the companies’ scores improved. Quantitative data remains sparse for the space. However, the number of companies in our universe that published an ESG report increased from three out of nine to seven out of 10. Our methodology remains unchanged, and our scoring remains intended to help investors evaluate ESG-related risks for the companies we cover. 

Highlights:

Key Themes: Human capital management, and security continue to be the most important issues to the companies in our coverage universe. Emissions and energy consumption, because of their importance to customers and employees, also remain high priorities. A number of our companies are carbon neutral, and a number of other companies have identified neutrality as an achievable goal.  

Enablement: We continue to believe that the positive impact that the companies in our coverage universe have on customers and other stakeholders goes largely overlooked and unscored by SASB metrics. The companies remain early in quantifying those benefits and are conservative when they tell their ESG and sustainability stories. Energy efficiency and financial inclusion are key enablement themes for the group.  

Willing Volunteers: Disclosure is voluntary, and a number of our companies have been public for a short time. Since our inaugural report, four companies (in our coverage universe) published ESG reports for the first time. 

Data Remains a Challenge: We continue to utilize a business mix score to evaluate all of the companies under coverage, including those that do not report ESG performance data. The score identifies which ESG metrics represent the most risk to value creation for each company.