"ESG Risks Trickle Into Financial Filings" from NACD's BoardTalk provides an overview (based on MyLogIQ data) of the extent of Russell 3000 Form 10-K Risk Factor and MD&A disclosure in 2019 on: i) climate change risk, (ii) Human Capital Management (the exact phrase only), and (iii) water scarcity, based on the percentages of overall disclosure and disclosure by industry sector.
Among the key findings:
- 30% of companies - most commonly those in the Energy & Mining sector - discussed climate change in their risk factors, and 3% discussed climate change risk in their MD&A.
- Just 8% disclosed HCM risk but - as noted above - this statistic is based on use of the exact phrase "Human Capital Management," which is not representative of the overall disclosure of employee/human capital management practices and risks.
- 32% of companies (most commonly Industrial Products companies) discussed water risk or water scarcity - typically in the risk-factors section (87%), with the balance in MD&A.
See our prior reports: "Sustainability Disclosure Benchmarking and Examples," "Proxy Disclosure: CSR, ESG & Human Capital Disclosure Samples Galore!", and "ESG Disclosure Liability Exposure & Risk Mitigation Tactics." This post first appeared in the weekly Society Alert!