A new report published by the NYU Stern School of Business Center for Sustainable Business and the Chief Executives for Corporate Purpose (CECP), ESG and the Earnings Call: Communicating Sustainable Value Creation Quarter by Quarter, finds that there is evidence that the way in which companies are disclosing information is shifting toward long-term sustainable value. For instance, some companies are sharing long-term focused content at investor days, convening investor-facing calls to focus on ESG themes, building elements of ESG-type disclosures into earnings call content and preparing long-term financial guidance (rather than quarterly Earnings per share (EPS) guidance).
The report finds that it is commonly a challenge to meaningfully discuss the ESG characteristics of a company’s value proposition on company quarterly earnings calls. However, it is possible to do so – provided the company lay the groundwork for the earnings call to become a setting for monitoring the delivery of a multiyear ESG-focused plan. This entails adjusting the mix and timeframe of the information reported.
The report provides concrete recommendations for how companies can meaningfully integrate ESG into their quarterly calls:
Appendix 1 of the report provides an ESG and Quarterly Reporting template designed with guidance from McKinsey & Company, CECP and FCLTGlobal. The report also provides a a Long-Term Plan Framework developed by CECP’s CEO Investor Forum to support CEOs in presenting a long-term plan to investors.