Sustainability referenced on earnings calls – all aboard?

– One-fourth of S&P 500 companies are referencing ESG in their earnings calls
– CFOs report that they are integrating ESG metrics into decision-making

Here’s a write-up from our advisory board member, Ginny Fogg: This recent article from FactSet reports than more than one-fourth of S&P 500 companies referenced ESG during their fourth-quarter earnings calls, the highest overall number going back at least ten years.  The author, John Butters, breaks down his research to the sector level and notes that all 11 sectors recorded a quarter-by-quarter increase in the number of companies citing ESG on earnings calls.

This  WSJ article also highlights the fact that more and more companies are talking about sustainability in their quarterly earnings calls, citing data from FactSet for third quarter earnings calls.  The article reports that many CFOs are embracing sustainability metrics as a priority and integrating them into decision-making.

This is a trend that’s worth embracing.  We’re talking real change in the way companies are doing business and communicating to their investors.

And these articles from MIT Sloan Management Review and Harvard Law School Forum on Corporate Governance take a deeper dive into how companies can integrate ESG strategy into quarterly earnings calls and overall business strategy, helping to shift from the short-term quarterly earnings focus to a longer-term view.

To see how you tell the story, check out this excerpt from the second quarter earnings call of my former employer, Norfolk Southern Corporation. Chief marketing officer Alan Shaw discusses the value of sustainability to the customers and to the business: “The sustainability advantages of the Norfolk Southern franchise deliver a competitive advantage, provide customers with solutions to their carbon offset goals, and are an accelerant to growth.”  (July 28, 2021)

All aboard?