Εnvironmental, social and governance (ESG) issues are among key trending themes in earnings calls during the first quarter of 2022, according to a GlobalData report.
The Company Filings Analytics Trends & Signals Q1 2022 report, which was based on Q1 2022 earnings call transcripts, reveals there was a 23% rise in ESG mentions in Q1 2022 when compared with Q4 2021.
The study also states that mentions of “various Sustainable Development Goals [SDGs] set by the UN have been steadily increasing in companies ESG reports since 2016”.
A breakdown of mentions by SDG
The data reveals that companies tend to refer to different SDGs in their earnings calls depending on the sector in which they operate.
There were no mentions made regarding SDG1, which concerns the ending of poverty, in any of the Q1 2022 earnings call transcripts, perhaps surprisingly given how poverty levels have risen as a result of the Covid-19 outbreak. FDI can help in achieving the SDG1 targets as greenfield investment brings with it job creation.
There were also no mentions of SDG2, which targets zero hunger, in the earnings calls of companies operating in the consumer/packaging and business and consumer services sectors.
Achieving good health and well-being was among the most mentioned SDGs in the transcripts, perhaps unsurprisingly given the added importance attached to such issues in the aftermath of the Covid-19 pandemic. The companies that mentioned SDG3 in their calls operate in banking and payments/insurance, business and consumer services, construction, industrial goods and machinery, mining, pharma and healthcare, and transport and logistics.
The GlobalData company filings analytics show no mentions of SDG4, which focuses on the provision of a quality education for all. Helping reach the SDG4 targets could provide companies with several opportunities as the lockdowns have affected those in need of workforce training, particularly in fields where staff have been displaced such as healthcare, logistics, agriculture, food and beverage supply chains, and transportation.
SDG5, which is about achieving gender equality, is crucial for all companies and investors if they are to truly embrace ESG policies and the SDGs more generally. However, the data reveals that only companies operating in the areas of banking, payments and insurance, construction, consumer and packaging, pharma and healthcare, and transport and logistics mentioned SDG5 in their earnings calls in Q1 2022.
As for SDG6, where the focus is on promoting clean water and sanitation, there were mentions from companies in the pharma and healthcare, retail, consumer and packaging, and banking, payments and insurance sectors.
There were no mentions regarding SDG7, which concerns the provision of affordable and clean energy.
SDG8 targets decent work and economic growth. Companies in most sectors made relevant mentions of this goal in their Q1 2022 earnings calls, with the exceptions being companies working in construction, mining and retail.
The earnings calls also included mentions about industry, innovation and infrastructure, which forms the basis of SDG9, especially in sectors related to banking and payments, finance, business and consumer services, construction, consumer and packaging, industrial goods and machinery, and technology.
SDG10 focuses on reducing inequalities, and the most mentions were in earnings calls of companies operating in banking and payments, insurance, consumer and packaging, and transport and logistics.
Sustainable cities and communities, the theme of SDG11, were mentioned mostly in sectors related to banking and payments, insurance, construction, and transport and logistics.
There were mentions of SDG12, which concerns responsible consumption and production, in the filings of companies operating in pharma and healthcare, technology, transport and logistics, consumer and packaging, construction, business and consumer services, banking and payments, and insurance.
Climate change, which is the focus of SDG13, has been a key topic in investors’ agendas over the past few years. The GlobalData report shows that there were mentions of SDG13 in the earning calls of companies operating in most sectors, with the exception of industrial goods and machinery, as well as retail companies.
There were mentions of SDG14, which focuses on life under water, only in the filings of companies operating in banking, payments and insurance, and transport and technology.
However, this was not the case for SDG15, which concerns life on land. This goal was mentioned in the filings of companies related to pharma and healthcare, consumer and packaging, construction, business and consumer services, and banking, payments and insurance.
SDG16, with its focus on peace, justice and institutions, was mentioned in the filings of business and consumer services and consumer and packaging companies. There were no mentions of SDG17, which concerns partnerships.
All eyes on diversity and inclusion
The GlobalData study also shows that companies are looking to provide a more diverse workforce through their hiring practices. There were mentions in the earnings calls relating to this topic in each quarter of 2021 as well as Q1 2022. However, there were more mentions of worker diversity in Q1 2021 than there were in Q1 2022.
The frequent mentions of ESG in the earnings calls, as well as the numbers of SDGs covered, shows just how much these topics have risen in the priorities of investors in the past few years. However, mentions in earnings calls are one thing – acting on these calls and making a long-term commitment to ESG-related issues and hitting the 2030 SDG targets is another.