Record-High Number of S&P 500 Companies Citing “ESG” on Earnings Calls in Q3

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 third 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 September 15 through December 4.

Of these companies, 79 cited the term “ESG” (in reference to environmental, social, and governance factors) during their earnings calls. At the sector level, the Financials (16), Industrials (13), Utilities (12), and Energy (11) sectors had the highest number of companies citing “ESG” on earnings calls for the third quarter.

Although this number is only 16% of the companies in the index, it reflects the highest overall number of S&P 500 companies citing “ESG” on earnings calls going back at least eight years.

It also reflects a 32% increase compared to the number of S&P 500 companies citing “ESG” in the previous quarter (60).

What drove the increase in citations for “ESG” during in earnings calls in Q3 relative to Q2? At the sector level, six of the 11 sectors recorded an increase in the number of companies citing “ESG” on a quarter-over-quarter basis. However, the Financials (+5), Industrials (+5), and Utilities (+5) sectors witnessed the largest increases in the number of companies citing “ESG” on earnings calls in Q3 compared to Q2. These three sectors accounted for almost 80% (15) of the total increase (19) for the index.

The third quarter marked the second consecutive quarter in which the number of S&P 500 companies citing “ESG” on earnings calls increased. It will be interesting to track the number of S&P 500 companies that cite “ESG” in their earnings calls going forward to see if the sequential increase in the number of companies discussing this topic continues in future quarters.

Listen to Earnings Insight on the go! In our weekly Earnings Insight podcast, John Butters provides an update on S&P 500 corporate earnings and related topics based on his popular Earnings Insight publication. The podcast is made available every Monday—listen on Apple podcasts, Spotify, or factset.com.