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Report: Stark Gap in Climate Disclosures Exists Between Large & Small Public Companies
[January 20, 2022]

Report: Stark Gap in Climate Disclosures Exists Between Large & Small Public Companies


NEW YORK, Jan. 20, 2022 /PRNewswire/ -- Amid growing expectations from regulators and investors, a new report reveals a stark gap between the climate disclosures of large and small companies. Indeed, larger firms disclose greenhouse gas (GHG) emissions at 2.5 times the rate of smaller firms.

Produced by The Conference Board in collaboration with Heidrick & Struggles and ESG data analytics firm ESGAUGE, Sustainability Disclosure Practices 2022 Edition: Getting Off the Sidelines examines corporate disclosure and performance data of US publicly traded companies, including the Russell 3000, S&P 500, and S&P MidCap 400. The report is accompanied by an online dashboard to analyze and create reports on the data by index, sector, and company size.

"Companies that have not been addressing climate, diversity, and other key sustainability issues in their public-facing communications should take a fresh look at whether to do so," said Thomas Singer, Principal Researcher at The Conference Board ESG Center and the report's lead author. "More and more, these disclosures are expected by key stakeholders who can influence the company's reputation and bottom line. Smaller companies that have not yet prepared climate disclosures will inevitably face greater pressure to do so, not least because the SEC is expected to propose rules on climate disclosure early this year."

The report also notes an increase in the number of companies obtaining external assurance for their sustainability information, with larger firms six times more likely to do so compared to smaller companies. CEOs and their management teams should anticipate that investors, lenders, credit rating agencies, ESG ranking firms, business partners, and regulators will increasingly expect assurance. Firms that begin to phase in assurance now can do so more strategically and efficiently than if they wait for regulatory mandates, including reporting standards being developed by the International Sustainability Standards Board (ISSB), the formation of which was announced at COP26.

Insights from the report include:

Larger firms disclose greenhouse gas (GHG) emissions at 2.5 times the rate of smaller companies.

  • More than half of S&P 500 companies discose climate risks in annual reports; 71 percent disclose GHG emissions in their annual reports, sustainability reports, or company websites.
  • Among the S&P MidCap 400, only 28 percent of companies disclose their GHG emissions.
  • Companies should be prepared to address both their impact on climate and climate's impact on the firm. 



Investors are seeking more information on companies' policies on biodiversity and deforestation, which are also connected to climate change.

  • 15 percent of S&P 500 companies, 8 percent of S&P MidCap 400 companies, and 5 percent of Russell 3000 companies have biodiversity policies.
  • Consumer staples companies have been the focus of recent shareholder resolutions on deforestation, yet only 15 percent in this sector have a biodiversity policy.
  • Companies should assess how their supply chain can affect, or be affected by, biodiversity loss and deforestation.

Companies need to assess their exposure to water risks, as the financial cost of inaction can significantly outweigh the cost of mitigation.


  • 12 percent of S&P 500 companies, 6 percent of S&P MidCap 400 companies, and 4 percent of Russell 3000 companies disclose the amount of water withdrawn from water-stressed areas.
  • Even industries that are highly exposed to water risks do not consistently provide relevant information on water.
  • Fewer than one in five companies in the Materials sector—a high-water-risk industry—disclose the amount of water withdrawn from water-stressed areas.

"In 2022, boards of directors and CEOs will be increasingly focused on how to advance corporate ESG goals for their organizations, ensuring they have in place a strong foundation and are taking the necessary steps to drive meaningful, sustainable change and impact," said Jeremy Hanson, a partner in the global CEO & Board of Directors Practice and co-lead of the global Sustainability Office at Heidrick & Struggles. "We also expect to see more emphasis on disclosure and measurement as ESG reporting and metrics affect the terms on which a company can access capital in the future. Going forward, the ability to show concrete results and precise data, while also being clear on where a company stands in addressing sustainability issues, is going to be a duty for every board, CEO, and organization, regardless of size or sector."

In 2021, compared to 2020, there were three times as many voted shareholder proposals filed on board and workplace diversity.

  • Companies both large and small should expect a continued push by shareholders on diversity, particularly as disclosure data reveal some notable gaps in the representation of women and minorities in leadership positions.
  • Financial and health care companies have majority-women workforces, but in both sectors, women account for just over one-third of management positions. These two sectors also have some of the lowest percentages of women on boards.
  • Few companies report the number of minorities in management positions. Among those that do, minorities represent less than one in four management positions at both Russell 3000 and S&P 500 companies.

Larger companies verify their sustainability information through external assurance at six times the rate of smaller companies.

  • More than one-third of S&P 500 companies obtain external assurance for at least some of their sustainability information, compared to only 6 percent of S&P MidCap 400 companies.
  • Expect investors, lenders, credit rating agencies, ESG ranking firms, business partners, and regulators to increasingly ask that companies have their sustainability information verified through external assurance.
  • Companies with operations in Europe will need to prepare for new rules beginning in 2024 requiring external assurance of sustainability information.

About The Conference Board
The Conference Board is the member-driven think tank that delivers trusted insights for what's ahead. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.org

About The Conference Board ESG Center
The Conference Board ESG Center serves as a resource, platform, and partner to help Member companies address their priorities in corporate governance, sustainability, and citizenship.
www.conference-board.org/ESG

About Heidrick & Struggles
Heidrick & Struggles (Nasdaq: HSII) is a premier provider of global leadership advisory and on-demand talent solutions, serving the senior-level talent and consulting needs of the world's top organizations. In our role as trusted leadership advisors, we partner with our clients to develop future-ready leaders and organizations, bringing together our services and offerings in executive search, diversity and inclusion, leadership assessment and development, organization and team acceleration, culture shaping and on-demand, independent talent solutions. Heidrick & Struggles pioneered the profession of executive search more than 65 years ago. Today, the firm provides integrated talent and human capital solutions to help our clients change the world, one leadership team at a time.® www.heidrick.com

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SOURCE The Conference Board


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