60% of listed companies have not set measurable and quantifiable environmental targets

Madrid, 24 February 2022- Despite the progress made in sustainability and the fact that all companies demonstrate their commitment to people and the planet, only 40% of the companies analysed report concrete and measurable environmental objectives. This percentage drops to 13% in the case of social objectives.  

This is one of the main conclusions of the study "The management of ESG aspects in listed companies", which analyses a sample of 85 companies listed on the continuous market, including all IBEX35 companies, carried out by the business impact consultancy Transcendent.

Although all the companies disclose their commitments at a high level, there are still few that communicate their ESG objectives. In the case of IBEX35 listed companies, 60% report specific, measurable and quantifiable environmental objectives. However, this figure drops to 26% for other listed companies.  

"We are detecting an unprecedented acceleration, but the speed at which companies are advancing is not the same, and the difference between IBEX 35 companies and the rest of the listed companies is very palpable", says Ana Ruiz, partner at Transcendent and head of the study.

The study shows that companies are focusing more on environmental aspects compared to social ones. Only 29% of IBEX 35 companies communicate specific, measurable and quantifiable social objectives which, in most cases, are linked to diversity and inclusion. In the rest of the listed companies, this figure drops to 2%.  

"Nowadays, the environmental factor is much more integrated in companies than social aspects", says Ana Ruiz, “and this highlights the difficulty companies have in defining and measuring the social contribution they make”.

The report shows that there is a significant difference between IBEX companies and other listed companies with regard to the use of incentives linked to ESG performance.  

More than half of IBEX35 companies (54%) have a variable remuneration system linked to ESG performance. Most of the remuneration is linked to the fulfilment of sustainability objectives, especially environmental ones, such as the reduction of Scope 1 and 2 CO2 emissions or the reduction of water consumption.  

The rest of the listed companies show a still incipient incorporation of this type of incentives, with only 18% declaring to have a bonus linked to ESG performance.

"Senior management remuneration packages linked to social and environmental objectives are going to accelerate their implementation as part of remuneration policy, both in the short and long term, because there is a trend among all stakeholders (consumers, companies, employees, investors, regulators and public institutions) to measure and value the impact of companies", explains Ángel Pérez Agenjo, Managing Partner of Transcendent.

Sustainability Committees on Boards of Directors, on the rise

In just two years the number of companies that have incorporated governing bodies dedicated to sustainability management has increased considerably, especially in the case of IBEX35 companies.  

The great progress made by IBEX35 companies in terms of sustainability governance has not yet materialised in the rest of the companies listed on the continuous market.  

The average among all the companies in the sample shows that 53% of them have a governing body responsible for dealing with sustainability issues exclusively or together with other issues and reporting to the Board of Directors. According to the report, in 14% of cases this function is integrated into other existing committees or bodies, generally the Appointments and Remuneration Committee.  

68% of IBEX 35 companies have a Sustainability Committee (either specific or shared with other functions), which reports directly to the Board of Directors, while in 2018 this figure was three times lower (20%).

"This evolution in the last 2 years is largely due to the growing demand from investors and the increase in regulation in these aspects, including the reform of the CNMV's Code of Good Corporate Governance", explains Ana Ruiz.

But there is a significant difference with other listed companies, as only 32% of them formally address ESG issues within a governance body, whether dedicated exclusively - or not - to sustainability.