During each corporate earnings season, it is not unusual for companies to comment on their ongoing corporate goals and initiatives. Given the growing focus on environmental, social, and governance (ESG) factors by investors, did companies in the S&P 500 comment on these factors during their earnings conference calls for the first quarter?
To answer this question, FactSet searched for the term “ESG” in the conference call transcripts of all the S&P 500 companies that conducted earnings conference calls from March 15 through June 4.
Of these companies, 154 cited the term “ESG” (in reference to environmental, social, and governance factors) during their earnings calls. This number is the highest overall number of S&P 500 companies citing “ESG” on earnings calls going back at least 10 years. The previous record was 127, which occurred in the previous quarter. At the sector level, the Financials (27), Industrials (24), and Utilities (18) sectors had the highest number of S&P 500 companies citing “ESG” on earnings calls for Q1.
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On a quarter-over-quarter basis, 27 more S&P 500 companies cited “ESG” on earnings calls in Q1 2021 relative to Q4 2020. At the sector level, nine of the 11 sectors recorded an increase in the number of companies citing “ESG” on a quarter-over-quarter basis, led by the Consumer Discretionary (+5) and Financials (+5) sectors.
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Of the 154 S&P 500 companies that cited “ESG” on earnings calls for Q1 2021, 32 (21%) also discussed the terms “decarbonization” or “clean energy” (or both) during their earnings calls. Twenty-five companies (16%) discussed the terms “diversity, equity, and inclusion” or “diversity and inclusion” during their earnings calls.
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