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

Earnings

By John Butters  |  December 7, 2020

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.

No. of S&P 500 Cos citing ESG on Earnings Calls

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.

No. of S&P 500 Cos citing ESG on Earnings Calls Q320 vs Q220

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.

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John Butters

Vice President, Senior Earnings Analyst, Investor Relations

Mr. John Butters is Vice President and Senior Earnings Analyst at FactSet. His weekly research report, “Earnings Insight,” provides analysis and commentary on trends in corporate earnings data for the S&P 500 including revisions to estimates, year-over-year growth, performance relative to expectations, and valuations. He is a widely used source for the media and has appeared on CNBC, Fox Business News, and the Business News Network. In addition, he has been cited by numerous print and online publications such as The Wall Street Journal, The Financial Times, The New York Times, MarketWatch, and Yahoo! Finance. Mr. Butters has over 15 years of experience in the financial services industry. Prior to FactSet in January 2011, he worked for more than 10 years at Thomson Reuters (Thomson Financial), most recently as Director of U.S. Earnings Research (2007-2010).

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