An analysis of Dow 30 global core indicator disclosures and environmental, social, and governance‐related ratings

• DOI: http://doi.org/10.1111/jifm.12123
• Published date: 01 October 2020
• Author: Christopher G. Calvin,Donna L. Street
• Date: 01 October 2020

J Int Financ Manage Account. 2020;31:323–349.

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wileyonlinelibrary.com/journal/jifm

DOI: 10.1111/jifm.12123

INSTITUTIONAL PERSPECTIVES

An analysis of Dow 30 global core indicator

disclosures and environmental, social, and

governance-related ratings

Christopher G.Calvin

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Donna L.Street

© 2020 John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.

University of Dayton, Dayton, OH, USA

Correspondence

Donna L. Street, University of Dayton,

Department of Accounting, Dayton, OH.

Email: dstreet1@udayton.edu

Abstract

We examine the extent to which US Dow 30 companies dis-

close the Global Core Indicators (GCIs), which are meas-

ures to assess companies’ contribution toward the United

Nation’s 2030 Agenda for Sustainable Development. We

find that the Dow 30 are generally compliant with disclos-

ing GCIs that align with US capital market reporting ex-

pectations, high-profile current events, and issues that are

financially relevant. We also find the Dow 30 are more

likely to disclose institutional and economic issues, rather

than environmental and social issues, and note disclosure

variation across industries in which the Dow 30 operate.

Supplemental analyses indicate that GCI disclosure levels

are generally higher when those GCIs are associated with

financially relevant ESG issues, suggesting companies are

more amenable to addressing sustainability when doing

so aligns with their mandate to shareholders. Correlation

analyses reveal that the GCI indices moderately or strongly

correlate with two of three MSCI sustainability ratings, high-

lighting companies’ focus on financially relevant areas, and

weakly correlate with companies’ CDP climate change rat-

ings, highlighting the limited scope of the GCIs in capturing

detailed environmentally focused sustainability efforts. We

also show that the MSCI sustainability ratings of the Dow

30 have generally trended higher over time, with increases

driven by companies in the manufacturing, financial, and

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CALVIN ANd STREET

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INTRODUCTION

The United Nations Conference on Trade and Development (UNCTAD) is presently working with gov-

ernments and other partners worldwide to assess progress toward achievement of the United Nation’s

(UN) 2030 Agenda for Sustainable Development. A set of Global Core Indicators (GCIs) focused

on measurable outcomes serves as the primary basis to assess companies’ contribution toward this

achievement, which involves an interconnected agenda of 17 Sustainable Development Goals (SDGs)

underpinned by 169 detailed targets aimed at achieving a global, sustainable future.1 UNCTAD (2019,

pp. 7–8) holds that,

Relevant data on companies’ contribution towards the SDGs is critical for assessing the

progress of SDG implementation; enhancing the SDG-oriented corporate governance

mechanisms, decision-making by investors and other key stakeholders, as well as pro-

moting behavioural change at the enterprise level.

Under UNCTAD’s leadership, accounting professionals, investors, governments, nongovernmental or-

ganizations, the Global Reporting Initiative (GRI), and the UN Global Compact (UNGC) collaborated to

identify the GCIs. The diverse stakeholders participating in the initiative considered entities’ current sus-

tainability reporting practices and leading reporting frameworks such as International Financial Reporting

Standards (IFRS), Integrated Reporting (IR), the Sustainability Accounting Standards Board (SASB),

GRI, and the UNGC, and selected 33 core indicators that address global relevant issues in the Economic,

Environmental, Social, and Institutional areas. Tables1–4, respectively, list the GCIs comprising the four

areas.2

The 33 GCIs are intended as a starting point in relation to sustainability and SDG reporting.

Accordingly, the indicators represent the minimum disclosures companies need to provide for govern-

ments to evaluate the private sector’s contribution to implementation of the SDGs. The GCIs are not

intended to preclude companies from providing more information in a qualitative or quantitative form,

nor do they cover all SDG macrolevel indicators. The GCIs represent a subset of indicators that have

been considered indispensable to assess the economic, environmental, social, and governance impacts

of companies’ activities. Additionally, the GCIs are intended to assist entities in providing baseline

data on sustainability matters in a consistent and comparable manner to meet the common needs of

different stakeholders of the SDG agenda.

Given the scarcity of literature addressing reporting on the GCIs, especially by companies head-

quartered in the United States (US), and more importantly to assist in measuring progress toward

achieving the SDGs, UNCTAD ISAR invited us to develop a case study addressing the sustainability

reporting of the Dow 30 (see Street and Calvin, 2020). Our case study and presentation at the 2019

UNCTAD International Standards of Accounting and Reporting (ISAR) conference focused on the

extent to which the US Dow 30 disclosed the 33 GCIs in their most recent sustainability report, 10-K,

and/or proxy statement. This paper extends that report.

retail industries. Our findings help fill a void in sustainabil-

ity literature on US company reporting of the GCIs and may

be informative to the United Nations Conference on Trade

and Development as it reviews the GCIs in support of the

2030 Agenda.