How do companies measure and report

corporate sustainability? A comparison

among the most innovative European
companies

Ortiz-de-Mandojana, N.

Antolín-López, R.

2023
This publication is a report by the Joint Research Centre (JRC), the European Commission’s science and knowledge service. It aims to provide
evidence-based scientific support to the European policymaking process. The contents of this publication do not necessarily reflect the
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Contact information
Name: Natalia Ortiz-de-Mandojana
Address: Campus de la Cartuja, s/n. Facultad de Ciencias Económicas y Empresariales. Universidad de Granada, Spain.
Email: [email protected]

EU Science Hub
https://joint-research-centre.ec.europa.eu

JRC132579

PDF ISBN 978-92-76-99454-1 doi:10.2760/935191 KJ-05-23-017-EN-N

Luxembourg: Publications Office of the European Union, 2023

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How to cite this report: Ortiz-de-Mandojana, N., Antolín-López, R., How do companies measure and report corporate sustainability? A
comparison among the most innovative European companies, Publications Office of the European Union, Luxembourg, 2023,
doi:10.2760/935191, JRC132579
Contents

Executive summary ..........................................................................................................................................................................................................................................3

1 Introduction.....................................................................................................................................................................................................................................................5
2 Methods..............................................................................................................................................................................................................................................................6
2.1 Sample and data collection ...............................................................................................................................................................................................6
2.2 Data analysis ...................................................................................................................................................................................................................................9
3 Text analysis of CS reporting......................................................................................................................................................................................................10
3.1 CS terminology heterogeneity in CS reporting .............................................................................................................................................10
3.2 EU regulations referred to in CS reporting .......................................................................................................................................................10
3.3 International sustainability frameworks mentioned in CS reporting ......................................................................................11
3.4 ESG ratings and indices included in CS reporting ......................................................................................................................................12
3.5 KPIs included in CS reporting ........................................................................................................................................................................................14
3.6 Materiality approaches in CS reporting ...............................................................................................................................................................16
4 Analysis of the divergences in measuring CS.............................................................................................................................................................18
4.1 Description of the main analysed CS metrics ...............................................................................................................................................18
4.2 Comparison between the Refinitiv ESG Score and Sustainalytics’ ESG Risk Ratings ..............................................21
4.3 Divergences and other CS metrics ...........................................................................................................................................................................26
5 Discussion and conclusions ..........................................................................................................................................................................................................29
References .............................................................................................................................................................................................................................................................32
List of abbreviations and definitions ...........................................................................................................................................................................................34
List of tables ........................................................................................................................................................................................................................................................35

i
Abstract
The field of measuring and reporting corporate sustainability (CS) practices currently faces relevant challenges.
First, although important steps have been taken towards transparency in reporting CS practices, there is still
significant flexibility in terms of the international sustainability frameworks that guide the reporting, the key
performance indicators (KPIs) that need to be included, and even the specific aspects that must be reported.
Second, there is a wide range of CS metrics rooted in different methodologies and assumptions that still lack
standardization and convergence. These two challenges make it difficult to compare companies and understand
their evolution towards greater sustainability. Based on these challenges in measuring and reporting CS
practices, this study has two objectives: (1) analysing companies’ CS reporting to determine the trends in terms
of the terminology, EU regulations, international sustainability frameworks, ratings and indices, KPIs, and
materiality approaches used, and (2) comparing the CS metrics of some of the most relevant rating agencies
to identify their similarities and differences. To achieve these objectives, we collected data on the 250 EU
companies ranked better in the 2021 EU Industrial R&D Investment Scoreboard. Overall, this work aims to
contribute to advancing greater homogenisation in the measurement and reporting of CS.

1
Acknowledgements
The authors would like to thank the team of the Directorate Growth and Innovation of the Joint Research Centre
(JRC) of the European Commission based in Sevilla, especially Nicola Grassano and Clemens Domnick.

Authors
Natalia Ortiz-de-Mandojana, University of Granada
Raquel Antolín-López, University of Almería

2
Executive summary
Aim of the study
The field of measuring and reporting Corporate Sustainability (CS) practices currently faces relevant challenges.
The previous JRC report “Measuring and disclosing environmental, social and governance (ESG) information and
performance” by Antolín-López and Ortiz-de-Mandojana (2023) highlighted two main issues. First, although
important steps have been taken towards transparency in reporting CS practices, there is still significant
flexibility in terms of the international sustainability frameworks that guide the reporting, the key performance
indicators (KPIs) that need to be included, and even the specific aspects that must be reported. Second, there is
a wide range of CS metrics rooted in different methodologies and assumptions that still lack standardization
and convergence. These two challenges make it difficult to compare companies and understand their evolution
towards greater sustainability.
Based on these challenges in measuring and reporting CS practices, this study has two objectives. First, we aim
to identify and understand current trends in CS reporting among the most innovative companies in the European
Union (EU). Specifically, we perform text analyses to identify trends in terms of the use of terminology to refer
to CS issues, EU regulations acknowledged, most cited international sustainability frameworks, environmental,
social, and governance (ESG) ratings and indices mentioned, the ESG key performance indicators (KPIs) used,
and the CS materiality approaches adopted. Second, we analyse the most popular metricsto measure CS
performance to discern similarities and incongruencies and contribute to a greater understanding of the state
of the art in CS measurement. Our comparative analysis of the Refinitiv ESG Scores, Sustainalytics’ ESG Risk
Ratings, S&P Global Sustainability Yearbook, RepRisk Index (RRI), Global 100 Index, and the Top 100 World’s
Most Ethical Companies enabled us to draw interesting conclusions about the high diversity and incongruencies
that currently exist in CS metrics. To achieve both goals, this study focused on the most innovative EU companies
that were extracted from the top ranked companies of the EU Industrial R&D (Research & Development)
Investment Scoreboard developed by the European Commission in 2021. Innovative companies are a good
context for analysis, as they are attentive to the environment and change.
With the development of these two objectives, this work aims to contribute to advancing greater
homogenisation in the measurement and reporting of CS.
Policy context
The EU has demonstrated a strong commitment to sustainable growth by committing to the Sustainable
Development Goals (SDGs) on the United Nations and climate-related goals of the Paris Agreement, and
incorporating them into the European Green Deal and Action Plan on Financing Sustainable Growth. European
regulations are currently in full swing, with new regulations coming into full force by 2022 and 2023.
Among previous main milestones, we can highlight the Non-financial Reporting Directive (NFRD), which has
been enforced since 2018 on large public-interest companies that requires companies to disclose non-financial
information such as measures taken regarding environmental and social matters, treatment of employees
(Directive 2014/95/EU). Another milestone is the Sustainable Finance Disclosure Regulation (SFDR), established
in 2021 to set sustainability-related disclosure requirements for financial market participants, financial
advisers, and financial products (Regulation EU 2019/20881). Additionally, we can mention the proposal of the
Corporate Sustainability Reporting Directive (CSRD), which is enforced on all large companies and all companies
listed on regulated markets (except listed micro companies) and introduces more detailed reporting
requirements and mandatory reporting. Finally, we highlight the EU Taxonomy Regulation (Regulation (EU)
2020/852) and the EU Taxonomy Climate Delegated Act, which are related to a classification system based on
scientific criteria establishing a list of environmentally sustainable economic activities.
Main findings
This study delivers interesting trends in CS reporting and identifies relevant CS measurement divergencies
among a sample of the most EU innovative companies.
With regards to CS reporting, our results revealed important trends related to a lack of homogeneity in how CS
reports are coined, the type of information included, and how CS information is disclosed. Such divergencies
could be solved by establishing clearer recommendations and global standards which would enable
stakeholders to locate this information more easily, thereby improving access and transparency in terms of CS
reporting and the benchmark of companies. KPIs are a key aspect in advancing reporting quality and should be
more standardised, at least the most relevant ones. Additionally, it is important to differentiate between the
levels of different KPIs and make KPIs more actionable for measurement (for example, emissions vs. climate

3
change). EU regulations such as the EU Taxonomy will help achieve this goal. Finally, we identified that the
references to materiality are still very limited. Companies must understand and clarify the double materiality
of their activities, i.e. their CS reporting and measurement must allow for the identification of not just the
impacts social and environmental issues may have on their financial aspects, but also the impact the company
has on global sustainability.
Concerning the analysis of the CS metrics of the most innovative EU companies, our results revealed that the
analysed rating agencies differ in how their metrics evaluate the CS performance of companies, existing great
differences in the companies placed in top positions by their rankings. The rankings divergencies can be
explained by the fact that the different CS metrics deeply differ in their conceptualization and purpose.
Therefore, the value of the CS metrics depends on whether the stakeholder uses them to gain a thorough
understanding of the assumptions on which each CS measure is built and what each measure represents.
Indeed, some CS metrics can be used in a supplementary manner, given that the approach and focus of existing
CS metrics differ considerably.
We hope that in the future greater clarity and standardisation will be developed in CS reporting and
measurement to allow for a more effective comparison among companies and the improvement of their
monitorisation and evolution. Eventually, it could ensure greater sustainability in companies, and overall, global
sustainability.

4
1 Introduction
Measuring and reporting corporate sustainability (CS) practices are central to advancing global sustainable
development. Companies should align their strategies, and measure and communicate their contributions to
global sustainability (SDG Compass, 2015). Many different stakeholders also need instruments to evaluate and
compare CS practices. For example, financial market players may evaluate where to invest responsibly and
NGOs may offer their support to the most sustainable companies and collaborate to help spread change.
Despite the importance of measuring and reporting CS practices, currently, this field has relevant challenges. In
the European context, important steps have been taken towards transparency in reporting CS practices, such as
with the Non-financial Reporting Directive (NFRD) (Directive 2014/95/EU) and the European Union (EU)
Taxonomy Regulation (Regulation (EU) 2020/852). However, European regulations for reporting CS information
still offer significant flexibility to companies in terms of international frameworks that guide the report, key
performance indicators (KPIs) that need to be included, and even the specific aspects that must be reported.
This flexibility, while enabling companies to tailor their reporting to their idiosyncratic conditions, also makes it
more difficult to compare companies and understand their evolution towards greater sustainability. In fact,
linked to the flexibility in company CS reporting, there is a challenge related to the wide range of proposed CS
measures, with a lack of standardisation among these instruments. Antolín-López and Ortiz-de-Mandojana
(2023) concluded that CS metrics and the rating market are dominated by a few big clusters of rating agencies,
such as Moody’s ESG Solutions, London Stock Exchange Group (LSEG) (which integrated Refinitiv), Morningstar
Group (Sustainalytics), and Standard & Poors (S&P). Although the rating market is concentrated, these rating
agencies use different methodologies and assumptions and their resulting CS measures do not always converge
(Berg et al., 2019; Chatterji et al., 2016; Christensen et al., 2022).
Considering these two major challenges in measuring and reporting CS practices, this study has two objectives.
First, we analyse companies’ CS reporting to determine the trends in terms of the terminology used to refer to
CS issues, the EU regulations acknowledged, the most cited international sustainability frameworks, the
environmental, social, and governance (ESG) ratings and indices followed, the KPIs used, and the approach to
the materiality of the CS aspects adopted. Second, we compare CS measurement instruments including the
metrics of some of the most relevant rating agencies, such as Refinitiv ESG Scores, Sustainalytics’ ESG Risk
Ratings, and the S&P Global Sustainability Yearbook, and a measure of ESG risk exposure on the media, such
as the RepRisk Index (RRI), along with important indices such as the Global 100 Index and the 100 World’s Most
Ethical Companies ranking to identify their similarities and differences. With the development of these two
objectives, this work aims to contribute to advancing greater homogenisation in the measurement and reporting
of CS.
To achieve these objectives, we have focused on the most innovative EU companies. The EU has demonstrated
a strong commitment towards sustainable growth by committing to the sustainable development goals (SDGs)
and climate-related goals of the Paris Agreement and translating them into the European Green Deal and Action
Plan on Financing Sustainable Growth. While Europe is a pioneer in promoting CS reporting, countries such as
the United States are currently in a phase of intense debate regarding what type of information should be
required from companies in their mandatory reports (Jebe, 2019; Securities and Exchange Commission, 2022).
Among all the EU companies, we analysed only those ranked at the top of the EU Industrial R&D (Research &
Development) Investment Scoreboard (hereinafter the EU R&D Scoreboard), developed by the European
Commission, in 2021. Innovative companies are a good context for analysis, as they are attentive to the
environment and change.
The remainder of this paper is structured as follows. Section 2 details the methodology used to achieve the
objectives. In Section 3, we discuss the analyses related to CS reporting. In Section 4, we illustrate the analyses
related to the comparison of different CS metrics. Finally, Section 5 presents a discussion of the results and the
derived conclusions.

5
2 Methods

2.1 Sample and data collection

To achieve the objectives of this study, we built a sample of the most innovative companies in Europe. To
identify these, we selected the 250 European companies better ranked in innovation worldwide according to
the 2021 EU R&D Scoreboard, which had the latest data available. Next, we collected information on CS
reporting and CS metrics for 2021. Owing to the data availability, the final sample for the reporting analysis
included 238 companies, while the sample for the CS metrics analysis was reduced to 184 companies with
complete data. Tables 1 and 2 include details on the frequency counts of the headquarters’ countries and
industries for the companies included in each sub-sample.

Table 1. Country distribution in the 250 EU R&D Scoreboard and both sub-samples

EU R&D CS reporting sample CS metrics sample

Country Freq. % Freq. % Freq. %

Austria 7 2.80 7 2.94 3 1.63

Belgium 8 3.20 8 3.36 7 3.80

Denmark 17 6.80 17 7.14 8 4.35

Finland 7 2.80 7 2.94 7 3.80

France 42 16.80 39 16.39 36 19.57

Germany 82 32.80 78 32.77 51 27.72

Hungary 1 0.40 1 0.42 1 0.54

Ireland 19 7.60 18 7.56 16 8.70

Italy 12 4.80 12 5.04 10 5.43

Luxembourg 2 0.80 2 0.84 2 1.09

Netherlands 27 10.80 25 10.50 21 11.41

Poland 1 0.40 1 0.42 1 0.54

Portugal 1 0.40 1 0.42 1 0.54

Slovenia 1 0.40 1 0.42 0 0.00

Spain 7 2.80 7 2.94 7 3.80

Sweden 16 6.40 14 5.88 13 7.07

Total 250 100 238 100 184 100

Source: Elaborated by the authors

The country with the highest number of companies included in both subsamples is Germany, with 78 cases in
the CS reporting analysis sample and 51 in the CS metrics analysis sample. This corresponds to the fact that
32.80% of the top 250 companies in the EU R&D Scoreboard are German. The next most represented countries
are France with 39 and 36 companies and the Netherlands with 25 and 21 companies in the CS reporting
analysis sample and the CS metrics analysis sample, respectively. Again, these two countries are ranked second
and third in terms of the number of companies positioned among the top 250 in the EU R&D Scoreboard.
Regarding the industry distribution, we have described the sub-samples based on NACE Rev. 2 classification
available for the analysed companies in Bureau van Dijk's Orbis database. Among the most frequently occurring
industries, we find companies from the following sectors: services (NACE 70–74, NACE 82, and NACE 93),
pharmaceuticals (NACE 21), manufacturing of computers, electronics, and optical products (NACE 26), and
manufacturing of motor vehicles and other transport (NACE 29 and NACE 30). We note that many service
companies present missing values in the CS metrics analysis subsample, which could be due to these companies
receiving less attention than industrial firms do, as they have less of an environmental impact.

6
Table 2. Industry distribution of the 250 top-ranked companies in the EU R&D Scoreboard and the two sub-samples

CS reporting CS metrics
Industries EU R&D
sample sample
Denomination NACE Freq. % Freq. % Freq. %

Agriculture 01 3 1.20 3 1.26 2 1.09

Mining 05–09 3 1.20 3 1.26 3 1.63

Food and beverages 10–11 4 1.60 4 1.68 3 1.63

13, 14, and
Textiles, leather, and footwear 4 1.60 4 1.68 4 2.17
15
Wood and paper 17–18 3 1.60 3 1.26 3 0.54

Chemicals 20 13 5.20 13 5.46 13 7.07

Pharmaceuticals 21 29 11.60 29 12.18 18 9.78

Rubber, plastics, and other non-metallic minerals 22–23 7 2.80 6 2.52 5 2.72

Metals 24–25 8 3.20 7 2.94 5 2.72

Computers, electronics, and opticals 26 28 11.20 28 11.76 23 12.5

Electrical equipment 27 8 3.20 8 3.36 8 4.35

Machinery and equipment 28 16 6.40 16 6.72 13 7.07

Motor vehicles and other transport 29–30 23 9.20 22 9.24 22 11.96

Other manufacturing 32 5 2.00 5 2.1 2 1.09

Electricity, gas, and steam 35 6 2.40 6 2.52 6 3.26

Water supply 36 2 0.80 2 0.84 2 1.09

Construction 42 2 0.80 2 0.84 2 1.09

Retail 46–47 4 1.60 4 1.68 4 2.17

Transportation and storage 49–52 5 2.00 5 2.1 4 2.17

Information and communication 58–62 22 8.80 21 8.82 20 10.87

Financial and insurance 64–66 22 8.80 21 8.82 13 7.07

82, 93, and
Professional and other services 32 12.80 26 10.92 9 4.89
70–74
Total 250 100 238 100 184 100
Source: Elaborated by the authors

To collect information about CS reporting, we first identified where each company had published information
about their CS practices in 2021 (except for six companies, for which we used the 2020 report, as it was the
most recent one available). We found a lack of homogeneity in CS reporting, specifically, in how companies
publish CS information (i.e. integrated with financial information versus published in a separate report) and in
the titles of reports. Table 3 illustrates the differences in CS reporting. First, we found that 61.35% of the
companies published CS information in specific CS reports, separated from financial information, whereas only
38.66% integrated CS and financial information in a single report. However, some companies among the
61.35% that published separate reports also published an integrated report with CS and financial performance
information. In these cases, we selected the specific CS reports if they were more detailed and complete than
the integrated report. On the contrary, when the companies developed only partial reports about a particular CS
aspect (e.g. biodiversity report or climate change report), we used the integrated report instead because it
provided a more holistic picture of all the activities executed in terms of sustainability. After searching for CS
information, 12 companies were removed from the sample because no report with CS information was found.
Thus, our sample was reduced to 238 EU companies.
Second, in addition to differences in terms of integrating CS with financial information, we found great
heterogeneity in the names used to coin reports. For example, for CS-related reports, we found the most

7
common title to be ‘Sustainability Report’, used in 29.41% of the cases. Approximately 7.56% of the companies
titled these as ‘Non-financial Reports’, using the nomenclature of the NFRD. Other alternatives include the ‘ESG
report’ and ‘CSR report’ (Corporate Social Responsibility report). The different nomenclatures of CSR, ESG, and
sustainability demonstrate the lack of homogeneity when referring to these topics; similar concepts exist but
have different connotations (Antolín-López and Ortiz-de-Mandojana, 2023). We also found a few companies
coining their CS-related report as ‘People and Planet Report’, ‘Tomorrow Report’, or ‘Sustainability Day Report’,
among others.
We also identified many variations in the naming of integrated reports. The most commonly employed terms
were ‘Integrated Annual Report’ and ‘Annual Report’, used by 11.76% and 12.61% of the companies in the
sample, respectively. ‘Universal Registration Document’ was used by 4.52% of the companies. We found other
companies using names such as ‘Annual and Sustainability Report’ or other less intuitive names such as ‘Group
Report’ or ‘Consolidated Management Report’. In these cases, we checked whether the company also included
information on sustainability, even though it was not referred to in the name of the report.

Table 3. Name heterogeneity in CS-related reports

Type/name of CS-related reports Number of companies %

Separate CS reports 146 61.35

Sustainability Report 70 29.41

Sustainability Progress Report 5 2.10

ESG Report 7 2.94

ESG overview/supplement/reporting 3 1.26

Corporate responsibility report 8 3.36

CSR Report, brochure/publication 5 2.10

Non-Financial Report 18 7.56

Others (e.g. People and planet report, sustainability day report, etc.). 30 12.61

Economic and CS-integrated reports 92 38.66

Integrated Annual Report 28 11.76

Annual Report 30 12.61

Universal Registration Document 11 4.52

Annual and Sustainability report 9 3.78

Others (e.g. Group Report, Consolidated Management Report,

14 5.88
Global report, etc.)

Total number of CS-related reports 238 100

Source: Elaborated by the authors

Regarding the CS metrics, we searched the companies in the Refinitiv ESG Scores database, Sustainalytics’ ESG
Risk Ratings, and S&P Global Sustainability Yearbook. We supplemented the sample with information from the
RRI, 2021 Global 100 Index, and Top 100 World’s Most Ethical Companies in 2021. The lack of information
about CS metrics for some companies reduced the initial sample size of 250 to 184 European companies.
Except for the RRI, all other data are currently available free of charge on the websites of rating agencies and
other providers. In the case of the RRI, the data were obtained from Bureau van Dijk's Orbis database belonging
to Moody's analytics.
The Refinitiv ESG database covers over 12,000 public and private companies globally. The Refinitiv ESG Score
results are from the collection of over 630 ESG indicators by independent analysts, which represent 10 key
sustainability aspects, such as resource use, emission, human rights, and product responsibility. Companies'
scores are contrasted with those of their industry peers.

8
Sustainalytics’ ESG Risk Ratings comprise a universe of more than 14,000 publicly listed companies. The ESG
Risk Ratings are created with publicly reported data covering approximately 350 indicators that represent 30
ESG criteria. The ratings consist of a quantitative aggregated score that serves to group companies into five
risk categories according to the risk that key ESG factors pose for companies, from negligible (enterprise value
has a Negligible Risk of material financial impacts driven by ESG factors) to severe.
Being listed in the S&P Global Sustainability Yearbook is a distinction earned by companies that excel in
sustainability performance, assessed using the S&P Global ESG score tool, among a range of approximately
8,000 publicly listed companies. Companies with the best ESG scores are distinguished within the Gold, Silver,
and Bronze classes. The remaining companies that do not receive a medal distinction are still listed as
sustainability yearbook members if they are among the top 15 in their industry (S&P Global, 2022).
The RRI dataset includes more than 210,000 companies associated with risk incidents. The RRI captures
company-specific reputational risks related to ESG issues. The RRI of a company depends only on its risk
incidents; thus, it reflects a company’s actual risk management instead of its communicated goals and policies.
The RRI ranges from zero (lowest) to 100 (highest), with higher values indicating higher risk exposure (RepRisk,
2022).
The Global 100 Index, developed by Corporate Knights, ranks the world’s 100 most sustainable corporations
annually. Their assessment included nearly 7,000 public companies, with revenues of over 1 billion US dollars.
The assessment is based on data for 23 KPIs, such as clean investment, representation of female directors, and
carbon emissions.
The Top 100 World’s Most Ethical Companies is a list developed yearly by Ethisphere. The rating system is
rooted in more than 100 multiple-choice and text questions aimed at capturing a company’s performance,
grouped into five categories: governance, leadership and reputation, culture of ethics, ethics and compliance
programs, and environmental and societal impacts. Companies with the best results are included as honourees
for the corresponding year.

2.2 Data analysis

To analyse differences in CS reporting, we performed text analysis using the analytical software Nvivo. This
statistical tool is commonly used in qualitative analysis, and it allows performing frequency counts of words
and short terms, along with other functions (QSR International, 2022). The first step in text analysis is to develop
dictionaries of terms for the aspects of interest. For this purpose, we relied on an extensive literature review on
measuring and disclosing ESG information and performance elaborated by Antolín-López and Ortiz-de-
Mandojana (2023). Specifically, we developed different dictionaries for CS terminology, EU regulations,
international sustainability frameworks, ESG ratings and indices, KPIs, and different materiality approaches
currently used in business.
The analysis of differences in the analysed CS metrics is mostly descriptive, paying special attention to the
best-positioned companies in each case. To complement this analysis, we also used some basic descriptive
measures, such as means, standard deviations, and comparison tests carried out with Stata statistical software.
However, this study did not aim to conduct an exhaustive analysis of the differences and causes that lead to
different CS valuations.

9
3 Text analysis of CS reporting
In this section, we present and discuss the results of the text analysis performed using the statistical software
Nvivo. Specifically, we analysed the differences in terms of (1) the types of terms used to refer to CS activities,
(2) EU regulations, (3) international sustainability frameworks, (4) ESG ratings and indices reported, (5) KPIs
included, and (6) the types of materiality approaches.

3.1 CS terminology heterogeneity in CS reporting

One of the most frequently acknowledged problems in CS measurement and reporting is the existence of many
related but differing terms to refer to sustainability aspects (Antolín-López et al., 2016). For example, Antolín-
López and Ortiz-de-Mandojana (2023) provided an overview of the heterogeneity of terms used to refer to CS
issues, such as CS, CSR, ESG, and SDGs. Although these terms have some aspects in common, they also involve
definitional nuances since they focus on the relationship between business and society. Table 4 summarises
the main characteristics of these terms.

Table 4. CS terminology frequency counts

Concept Definition Main dimensions Main objective

Corporate action that simultaneously promotes Identify and mitigate business-related

Economic, social, and
CS economic prosperity, social equity, and sustainability impacts and their
environmental
environmental integrity. interrelations.

Identify and mitigate business-related

Corporate action that promotes moral/social Social (and
CSR social harm or irresponsible behaviours in
responsibility behaviours. environmental)
society.
The collection of environmental, social, and
Environmental, social, Identify ESG-related risks and opportunities
ESG governance factors that can materially affect a
and governance for companies’ financial performance.
business.

A complete set of goals that needs to be Environmental, social, Highlight urgent global sustainability
SDGs achieved to ensure sustainable development at economic, and challenges and ensure a sustainable future
a global level. governance for all.
Source: Antolín-López and Ortiz-de-Mandojana (2023)

Table 5 presents the frequency of use of these terms in the reports we analysed of the European companies.
The results of our text analysis illustrated that the term 'SDG' was used most frequently in the 2021 reports,
followed by the term 'ESG', as 87.82% and 83.19% of the documents referred to the two terms, respectively.
Surprisingly, the most traditional term, 'CS', was mentioned in only 41.60% of the documents. These terms
seem to confirm the increasing popularity of SDGs as the main framework of action to integrate sustainability
at the firm level (Delgado-Ceballos et al., 2023, Montiel et al., 2021). This also indicates the prominence gained
by the term 'ESG', which was originally coined by finance academics and practitioners, the use of which has
recently extended to the business field to refer to sustainability actions and performance (Antolín-López and
Ortiz-de-Mandojana, 2023).

Table 5. Frequency counts of most commonly used CS terms

Citing documents Number of

CS terms Abbreviations
citations
N %

Environmental, Social, and Governance ESG 198 83.19 7,298

Corporate social responsibility CSR 141 59.24 3,452

Corporate sustainability CS 99 41.60 353

Sustainable Development Goals SDGs 209 87.82 2,908

Source: Elaborated by the authors

3.2 EU regulations referred to in CS reporting

Understanding the regulatory environment is important when discussing CS measurement and reporting. The
regulatory environment in the EU is very large and complex and has come a long way in the last few years,

10
although Antolín-López and Ortiz-de-Mandojana (2023) identified a few key milestones of vital importance.
Specifically, among these milestones, we can highlight the NFRD, which has been enforced since 2018 on large
public-interest companies with more than 500 employees, including listed companies, banks, insurance
companies, and other companies designated by national authorities as public-interest entities. This regulation
requires companies to disclose non-financial information such as measures taken regarding environmental and
social matters, treatment of employees, respect for human rights, anti-corruption and bribery, and diversity on
company boards (Directive 2014/95/EU). Another milestone is the sustainable finance disclosure regulation
(SFDR), which was established in 2021 as sustainability-related disclosure requirements for financial market
participants, financial advisers, and financial products (Regulation EU 2019/20881). This regulation is completed
with the regulatory technical standards set out in the Delegated Regulation to be used by financial market
participants when disclosing under the SFDR. Additionally, we can mention the proposal of the Corporate
Sustainability Reporting Directive (CSRD), which is enforced on all large companies and all companies listed on
regulated markets (except listed micro companies). This newly proposed directive is a response to some of the
problems detected in the NFRD in its extension of the scope of its application and introduction of more detailed
reporting requirements and mandatory reporting. Finally, we highlight the EU Taxonomy Regulation (Regulation
(EU) 2020/852) and the EU Taxonomy Climate Delegated Act, which are related to a classification system based
on scientific criteria establishing a list of environmentally sustainable economic activities. The aim is to provide
companies, investors, and policymakers with appropriate and clear definitions of the economic activities that
can be considered environmentally sustainable.
We focus on the text analyses of these EU regulatory milestones. Table 6 shows the frequency with which the
companies refer to each regulation. The EU Taxonomy is receiving special attention in CS reporting, with 66.39%
of the companies including references to it in their 2021 reports. For the text analysis, we searched for ‘EU
taxonomy’ and ‘taxonomy’, as it is sometimes referred to in this simplified way, but in reference to EU regulation.
It is also noteworthy that 14.29% of the companies named the CSRD, as this is still at the proposal stage. This
shows the proactivity of some companies in the sample.

Table 6. Frequency counts of types of EU regulations

Citing documents Number of

EU regulations Abbreviations
N % citations

The Non-Financial Reporting Directive NFRD 30 12.61 95

The Sustainable Finance Disclosure Regulation SFDR 13 5.46 133

Regulatory technical standards 15 6.30 21

The Corporate Sustainability Reporting Directive CSRD 34 14.29 87

EU Taxonomy or Taxonomy 158 66.39 4,055

The EU Taxonomy Climate Delegated Act 10 4.20 20

Source: Elaborated by the authors

3.3 International sustainability frameworks mentioned in CS reporting

International sustainability frameworks are standards that provide guidelines for best-in-class sustainability
practices (Siew, 2015) and conventions for measuring and disclosing sustainability impacts (Escrig-Olmedo et
al., 2010). Many approaches have been proposed to measure and report aspects of CS. Antolín-López and Ortiz-
de-Mandojana (2023) provided an overview of existing general and specific international sustainability
frameworks to measure and disclose relevant CS aspects. The international sustainability frameworks were
divided into general international frameworks, which jointly address sustainability dimensions, and specific
international frameworks, which only focus on a specific sustainability issue or dimension. Table 7 illustrates
the number of times most EU innovative companies reference each of the main international sustainability
frameworks.
Regarding general international sustainability frameworks, the most referenced in the CS reports are the SDGs,
with 87.82% of the analysed documents referencing this framework. The Global Reporting Initiative (GRI)
framework is also frequently referenced (by 73.11% of the companies), which is understandable because it is
a well-accepted approach that specifically guides companies in reporting. Meanwhile, 61.34% of companies

11
reference the United Nations Global Compact (UNGC), and 47.90%, the Sustainability Accounting Standards
Board (SASB) standard.

Table 7. Frequency counts of international sustainability frameworks

Citing
documents Number of
Abbreviations Sustainability frameworks
citations
N %

General sustainability frameworks

GRI Global Reporting Initiative 174 73.11 13,608

IFC performance
International Finance Corporation performance standards 5 2.10 7
standards
IIRC International Integrated Reporting Council 30 12.61 90

IRIS+ 13 5.46 32

ISO 26000 International Organization for Standardization 26000 23 9.66 69

OECD Guidelines Organisation for Economic Co-operation and Development Guidelines 93 39.08 172

SASB Sustainability Accounting Standards Board standard 114 47.90 1,277

SDGs Sustainable Development Goals 209 87.82 2,908

UNGC United Nations Global Compact 146 61.34 982

PRI Principles of Responsible Investment 37 15.55 106

Specific environmental frameworks

CDP Carbon Disclosure Project 157 65.97 1,521

GHG Greenhouse Gas Protocol 161 67.65 759

SBTi Science-Based Targets 146 61.34 1,366

TCFD Task Force on Climate-Related Financial Disclosures 149 62.61 1,773

Specific social frameworks

ILO standards International Labour Organization 10 4.20 15

UDHR Universal Declaration of Human Rights 89 37.39 139

Source: Elaborated by the authors

Therefore, this text analysis draws attention to the fact that although there is a lot of freedom in the frameworks
to be used in reporting, most companies focus on a few international frameworks (i.e. SDGs, GRI, UNGC, and
SASB). Additionally, we found that specific environmental frameworks were more commonly used than social
frameworks.
Regarding the specific frameworks, Table 7 shows that those related to the environment were cited much more
frequently than those related to the social dimension. Frameworks related to the environment were referenced
at a similar level, with approximately 65% of the companies using each framework. Regarding the social
dimension, references to the Universal Declaration of Human Rights (UDHR) (37.39%) far exceeded references
to the International Labour Organization (ILO) (4.20%). These results might indicate that many companies still
associate sustainability with environmental issues and not so much with social issues, which have been
traditionally more associated with CSR.

3.4 ESG ratings and indices included in CS reporting

Rating agencies have played a significant role in the development of CS measures, especially ESG measures.
However, as we can see in Table 8, references to rating agencies, their metrics, and their indices are still scarce
in the CS reports of companies.

12
Among the ESG ratings, the most referenced was Moody’s ESG (or Vigeo-Eiris) but only 12.61% of the analysed
companies cited it. The most referenced indices are FTSE4Good with 23% of companies referencing it in their
reporting followed by the ‘Dow Jones Sustainability Indices’ (or DJSI) with 7.14% and the ‘STOXX Global ESG
Leaders’ with 5.46%.

Table 8. Frequency counts of ESG ratings and indices

Citing documents Number of
ESG ratings and indices
N % citations
ESG rating
Moody’s ESG (or Vigeo-Eiris, as formerly known) 30 12.61 59
Bloomberg ESG 1 0.42 1
Refinitiv ESG 0 0.00 0
FTSE Russell ESG 1 0.42 1
Sustainalytics ESG Risk 10 4.20 11
MSCI ESG 10 4.20 13
S&P Global ESG (or Corporate Sustainability Assessment) 14 5.88 31
ISS ESG Corporate 10 4.20 10
ESG indices
ESG Euronext 2 0.84 2
Ethibel Sustainability Index 4 1.68 4
Bloomberg MSCI Socially Responsible 0 0.00 0
Bloomberg MSCI Sustainability 0 0.00 0
Bloomberg MSCI ESG 0 0.00 0
Bloomberg MSCI Green Bond 1 0.42 1
Bloomberg SASB ESG Corporate 0 0.00 0
Bloomberg SASB ESG Equity 0 0.00 0
Bloomberg Goldman Sachs Global Clean Energy 0 0.00 0
Bloomberg Rockefeller US All Cap Multi-Factor ESG Improvers 0 0.00 0
Refinitiv Eurozone ESG Select 0 0.00 0
Refinitiv/S-Network ESG Best Practice 0 0.00 0
Refinitiv IX Global ESG High Dividend Low Volatility Equal Weighted 0 0.00 0
Refinitiv Global Resource Protection Select 0 0.00 0
FTSE4Good 55 23.11 109
FTSE ESG 1 0.42 1
Jantzi Social Index (or JSI) 0 0.00 0
Global Sustainability Signatories (or GSS) 1 0.42 1
STOXX Global ESG Leaders 13 5.46 14
MSCI KLD 400 Social Index 0 0.00 0
MSCI Fixed Income ESG (or CALCOR) 0 0.00 0
The Calvert US Large-Cap Core Responsible 0 0.00 0
Calvert International Responsible Index 0 0.00 0
Dow Jones Sustainability Indices (or DJSI) 17 7.14 24
ISS ESG EVA Leaders Index 0 0.00 0
S&P Global Sustainability Yearbook 2 0.84 2
Global 100 Index 2 0.84 2
World’s Most Ethical (or WME) 8 3.36 39
Source: Elaborated by the authors

13
3.5 KPIs included in CS reporting
The inclusion of KPIs in CS is of particular significance. In fact, the Guidelines on Non-Financial Reporting, which
specify the methodology for reporting non-financial information, highlight that companies can improve their
comparability by disclosing high-quality and broadly recognised KPIs, such as metrics that are widely used in a
sector or for specific thematic issues (European Commission, 2017). The importance of KPIs is illustrated by the
fact that this document introduces many examples of KPIs along with the guidelines.
To analyse the most frequently used KPIs, we first developed a dictionary of possible KPIs and then analysed
the occurrence frequency of these indicators. This dictionary was compiled after an extensive review of the
literature, although we recognise that other frequent indicators may not be included in this analysis. We divided
the analysis into indicators or concepts related to ESG issues.
Table 9 lists the environmental KPIs. The most frequently mentioned KPIs are those related to ‘emissions’, with
96.64% of the documents mentioning the general term, 62.18% mentioning ‘carbon emissions’, and 78.57%
referring to ‘GHG emissions’. Additionally, there is a predominance of indicators related to ‘energy’, such as
‘energy efficiency’ (84.45% of the documents) and ‘renewable energy’ (86.55%). ‘Climate change’ has also been
indicated multiple times, with 95.80% of companies including references to this term. These figures might be
explained by the prominence these terms have gained in the media and institutional environments worldwide
with regard to other environmental aspects in recent years. In fact, these are the main indicators addressed by
the environmental agendas of EU governments. While both emissions and energy use are clear and highly
representative indicators of the company's impact on the environment, we recognise that the reference to
climate change is much more global and difficult to judge since this term represents a category of indicators
(i.e. those related to the company's impact on climate change) rather than an indicator or KPI.

Table 9. Frequency counts of environmental KPIs in CS reporting

Citing documents Number of

Terms
N % citations

Pollution 162 68.07 834

Emissions 230 96.64 22,099

Carbon emissions 148 62.18 1,128

GHG emissions 187 78.57 2,771

Environmental products 3 1.26 9

Green products 19 7.98 32

Product stewardship 40 16.81 587

Environmental innovation 3 1.26 3

Sustainable innovation 38 15.97 141

Climate change 228 95.80 6,234

Water security 39 16.39 100

Water efficiency 33 13.87 67

Waste management 159 66.81 752

Hazardous waste 154 64.71 1,039

Renewable energy 206 86.55 2,138

Energy efficiency 201 84.45 2,172

Biodiversity 162 68.07 2,498

Resources efficiency 8 3.36 8

Resources use 22 9.24 27

Environmental incidents 27 11.34 104

Environmental fines 8 3.36 9

14
Source: Elaborated by the authors

In relation to the least frequently occurring KPIs, it is worth noting the negligible presence of innovation-related
indicators, such as ‘environmental innovation’, ‘environmental products’, ‘green products’, ‘product stewardship’,
and ‘sustainable innovation’. Since these are among the top 250 companies in the EU R&D Scoreboard, we
expected to find more indicators related to proactive CS practices. Finally, we note the infrequency with which
the CS reports allude to negative events related to environmental management, such as environmental incidents
and environmental fines, with only 11.34% and 3.36%, respectively, of the documents mentioning them. These
results align with scholars' claims of companies reporting only positive actions related to the natural
environment while omitting their negative environmental impacts, which is termed as greenwashing (e.g. Wang
et al., 2018).
Table 10 lists the social KPIs. In this case, the most common KPIs are those related to employees, such as
‘health’ (99.58%), ‘health and safety’ (91.60%), ‘working conditions’ (73.53%), and ‘diversity’ (97.06%).
Furthermore, references to ‘human rights’ (92.86%) are very common, which is reasonable, as this reflects the
company's respect towards all stakeholders.

Table 10. Frequency counts of social KPIs in CS reporting

Citing documents Number of

Terms
N % citations

Health 237 99.58 16,062

Health and safety 218 91.60 6,558
Working conditions 175 73.53 829
Human rights 221 92.86 8,371
Labour rights 38 15.97 147
Labour standards 36 15.13 98
Gender equality 140 58.82 749
Diversity 231 97.06 8,004
Product safety 107 44.96 727
Customer responsibility 0 0.00 0
Supply chain labour standards 0 0.00 0
Community relations 17 7.14 30
Philanthropy 1 0.42 2
Bottom of pyramid 2 0.84 2
Source: Elaborated by the authors

Finally, Table 11 includes corporate governance KPIs. Of the KPIs analysed, the most frequently occurring one
is ‘risk management’, with 92.02% of the companies including this expression in their reports. This indicates the
general inclination of companies to pay attention to those ESG aspects that have a particular risk of impact on
the company. References to ‘anti-corruption’ (83.61%) and ‘ethics’ (90.34%) are also very common in the
analysed reports.

Table 11. Frequency counts of corporate governance KPIs in CS reporting

Citing documents
Terms Number of citations
N %
Anti-corruption 199 83.61 1,787
Tax transparency 25 10.50 44
Corporate governance 200 84.03 7,435
Risk management 219 92.02 6,698
Ethics 215 90.34 5,659
Source: Elaborated by the authors

15
Greater standardisation in the use of KPIs would be beneficial in advancing the quality of CS reporting. Although
we detected a clear trend in the presence of important indicators such as those related to a company's impact
on climate change, health, diversity, and human rights, there is still too much diversity in CS reporting. In the
following years, thanks to EU Taxonomy, it will probably become easier to find more general and homogeneous
indicators, which will enable comparability among companies in terms of their CS actions and performance.

3.6 Materiality approaches in CS reporting

Materiality refers to issues that are important for a company or business sector because they can have major
effects on corporate financial and economic performance, reputation, and relationships with internal and
external stakeholders (Jebe, 2019). Many ESG investors in financial markets are interested in the financial
materiality of ESG factors, as they are attracted by evidence suggesting that integrating ESG factors can
improve shareholder returns (Eccles et al., 2020; Van Duuren et al., 2016). This approach differs from
sustainability materiality, in which focus is placed on the negative or positive impact that companies have on
society and the natural environment (Antolin-López and Ortiz-de-Mandojana, 2023). In contrast, double
materiality refers to the dual consideration of financial and sustainability materiality (European Commission,
2019).
Table 12 shows the analysis results of the materiality approaches mentioned in CS reporting. The expression
‘materiality’ appears with great frequency (87.45% of the documents), usually in connection with the expression
‘materiality analysis’. We also analysed whether the company pays attention to ‘financial materiality’ or
‘sustainable materiality’. To do so, we created a dictionary of terms to capture one or the other. We see that
‘financial materiality’ has a greater presence than ‘sustainable materiality’ (21.34% versus 12.97%). Among
the different expressions related to financial materiality, the most frequently used is ‘material risk’. This
approach is similar to that followed by ESG rating agencies in creating their ESG scores, as they commonly
emphasise ESG aspects that represent greater financial risks or opportunities for the company as a means to
increase the profitability of investment portfolios. This contrasts with the definition of CS, which centres on
identifying the sustainability impacts of companies and the company’s efforts to mitigate them.
Finally, Table 12 shows that the expression ‘double materiality’ appears only in 15.90% of the documents. This
is noteworthy because of the prominence of double materiality in the Guidelines on Reporting Climate-related
Information published in 2019 to clarify the application of the NFRD. Specifically, this document established
that the double materiality perspective included in the essence of the NFRD means that reporting must
reference both 1) the company’s ‘development performance [and] position’, which indicates financial materiality
in the broad sense of affecting the company's value; 2) the ‘impact of [the company’s] activities’, which indicates
environmental and social materiality (European Commission, 2019).

Table 12. Frequency counts of materiality terms

Citing documents Number of

Materiality-related terms
citations
N %
Materiality 209 87.45 3,117
ESG materiality 8 3.35 23
Sustainable materiality
Sustainable materiality 1 0.42 2
Sustainably material 0 0.00 0
Impact materiality 4 1.67 8
Stakeholders' materiality 22 9.21 33
Environmental and social materiality 2 0.84 3
Social and environmental materiality 1 0.42 1
Social materiality 2 0.84 2
Socially material 0 0.00 0
Environmental materiality 1 0.42 1
Environmentally material 0 0.00 0
Total number of documents citing any form of sustainable materiality 31 12.97 50

Financial materiality

16
 Financial materiality 13 5.44 27
Financially material 18 7.53 21
Economic materiality 1 0.42 3
Material sustainability risk or ‘material risk’ or ‘material environmental risk’ or
29 12.13 48
‘material social risk’ or ‘material ESG risk’
Total number of documents citing any form of sustainable financial
51 21.34 99
materiality
Double materiality

Double materiality 38 15.90 96

Source: Elaborated by the authors

Clear references to double-materiality CS should be made in reporting. Using SDGs as a reporting framework
can help cover sustainability materiality by connecting the activities of companies with specific global
sustainability goals (Delgado-Ceballos et al., 2023). However, using only the sustainability materiality approach
is insufficient, as it is also important that companies connect their CS measurement and reporting with financial
materiality because this approach helps ensure that social and environmental issues are not considered
ancillary to company activities, but as part of its main valuation (Jebe, 2019). Therefore, the use of a double
materiality approach is required in CS reporting since it can ensure that companies pay attention to and
communicate those aspects of CS that could affect the company financially and also consider and communicate
their roles in global sustainability.

17
4 Analysis of the divergences in measuring CS
In this section, we describe the comparison results of different CS metrics from a sample of the top 250
companies in the EU R&D Scoreboard. Specifically, we analysed two different quantitative ESG ratings: the
Refinitiv ESG Scores and the Sustainalytics’ ESG Risk Ratings. We also analysed listing in the S&P Global
Sustainability Yearbook, a distinction granted to companies with the best performance in each industry, and the
RRI, a measure of ESG risk exposure in the media. Finally, we supplemented the analyses with two corporate
sustainability indices: the Global 100 Index and the Top 100 World’s Most Ethical Companies. The following
analyses are mostly descriptive, paying special attention to the best-positioned companies in each case and
describing some basic descriptive measures, such as means, standard deviations, and comparison tests
conducted using Stata statistical software.

4.1 Description of the main analysed CS metrics

When comparing different CS metrics, we must consider that they are constructed using different
methodologies and have different scales and qualitative meanings. We begin this section with a brief description
of the different CS metrics included in these analyses and an explanation of how rating agencies interpret them.
Table 13 summarises the meanings of the different levels of these CS metrics. For a more extensive review of
the differences in methodology, see Antolín-López and Ortiz-de-Mandojana (2023).

Table 13. ESG metrics and other indicators levels and qualitative meanings

Sustainalytics’ ESG The S&P Global Sustainability

Refinitiv ESG Score RepRisk Index (RRI)
Risk Ratings Yearbook

Scores Meaning Scores Meaning Scores Meaning Scores Meaning

A minimum total score

Poor relative ESG performance of 60, with the score
and insufficient degree of Negligible falling within 1 of the Low Risk
0 to 25 0 to 9.99 Gold 0 to 25
transparency in reporting Risk top-performing Exposure
material ESG data publicly. company’s score in
their industry.

A total score of at least

Satisfactory relative ESG
57, with the score
performance and moderate
> 25 to 10 to falling within a range Medium Risk
degree of transparency in Low Risk Silver 26 to 49
50 19.99 of 1 to 5 of the top- Exposure
reporting material ESG data
performing company’s
publicly.
score in the industry.

A score of at least 54,

Good relative ESG performance with the score falling
> 50 to and above average degree of 20 to within a range of 5 to High Risk
Medium Risk Bronze 50 to 59
75 transparency in reporting 29.99 10 of the top- Exposure
material ESG data publicly. performing company’s
score in the industry.

Excellent relative ESG Did not receive a medal

Very High
> 75 to performance and high degree of 30 to distinction, but they are
High Risk Member 60 to 74 Risk
100 transparency in reporting 39.99 still among the top 15
Exposure
material ESG data publicly. in their industry.

Extremely
40 to 100 Severe Risk 75 to 100 High Risk
Exposure
Source: Adapted from Refinitiv (2022), Sustainalytics’ ESG Risk Rating (2022), S&P Global (2022), and RepRisk (2022)

The Refinitiv ESG Score comprises a subset of 186 metrics (from more than 630 company-level ESG metrics)
used to create an ESG assessment for a company. The selected metrics are stated as the most comparable and
material per industry. A materiality matrix was built for environmental and social factors based on the relative
proportion of a particular sector's contribution to the overall gross number of this factor in the complete ESG
universe. This methodology enables Refinitiv to produce an ESG score between 0 and 100, with high values
indicating a good ESG situation.

18
Sustainalytics’ ESG Risk Ratings are underpinned by three main dimensions known as the building blocks:
corporate governance, material ESG issues (MEIs), and idiosyncratic ESG issues. The final ESG risk rating is
created as the aggregation of the unmanaged risk scores of individual material ESG issues (the difference
between a company’s exposure and its managed risks). Sustainalytics’ ESG Risk Ratings are exclusively rooted
in financial materiality, as an issue is regarded as being material when it has a potentially significant impact
on the economic value of a company. This methodology enables Sustainalytics to produce risk ratings between
0 and 100, with high values indicating bad ESG risk situations.
Listing in the S&P Global Sustainability Yearbook is a distinction achieved by companies that stand out for their
sustainability performance, determined using the S&P Global ESG score tool, which ranges from 0 to 100. The
S&P Global Sustainability Yearbook evaluates the best-performing companies in each industry and
simultaneously requires a minimum level of performance to assign different distinctions (Gold, Silver, and
Bronze) or at least consider the company a member of the sustainable yearbook.
The RRI reflects the current level of media and stakeholder attention on companies' ESG performance on ESG
(RepRisk, 2022). RepRisk bases its analysis on media exposure, not on performance analysis, unlike previously
described metrics. RepRisk analyses documents for relevancy and sentiment scoring as well as entity detection
and issue classification, based on proprietary machine-learning models. The RRI requires no weighting of ESG
issues (e.g. by sector or country), and it does not change depending on whether an issue is an environmental,
social, or governance issue (RepRisk, 2022). The RRI produces an ESG score between 0 and 100, with low values
indicating a good ESG situation.
The Global 100 assessment is an index based on data for 23 KPIs, such as clean investment, female directors'
representation, and carbon emissions. In short, 12 possible categories are identified, from the best companies,
with scores of up to 75 points, to the worst, with 25–30 points. However, for this analysis, we focus only on
whether the company is included in the Global 100.
Finally, the rating system of the Top 100 World’s Most Ethical Companies is an index rooted in more than 100
multiple-choice and text questions aimed at capturing a company’s performance. These questions are grouped
into five distinct categories: governance (15 of the weight), leadership and reputation (10), culture of ethics
(20), ethics and compliance program (35), and environmental and societal impact (25). Companies with the best
results are included as honourees for the corresponding year.
As this study aims to understand the differences in CS metrics for the companies ranked best in the 2021 EU
R&D Scoreboard, Table 14 lists the CS metrics for the top 10 companies in this ranking.

19
Table 14. ESG indicators of the 10 best ranked European companies in the 2021 EU R&D Investment Scoreboard

EU top- S&P Global Global Most

Refinitiv Sustainalytics’ RepRisk
ranked Company Country NACE Industries Sustainability 100 Ethical
ESG Scores Risk Ratings Index (RRI)
R&D Yearbook Index Companies

Motor vehicles and other

1 Volkswagen Germany 2910 85 29.7 - 58 - -
transport
Motor vehicles and other
2 Daimler Germany 2910 93 11.2 - 53 - -
transport

3 Bayer Germany 2120 Pharmaceuticals 90 29.9 - 61 - -

Motor vehicles and other

4 Bayerische Motoren Werke (BMW) Germany 2910 89 22.9 Silver 41 - -
transport
Motor vehicles and other
5 Robert Bosch Gmbh Germany 2932 61 14 - 26 - -
transport

6 Sanofi France 2120 Pharmaceuticals 90 22.3 Silver 27 65 -

Manufacture of machinery and

7 Siemens Germany 2811 86 30.1 Gold 51 25 -
equipment

8 Sap Germany 5829 Information and communication 94 10.8 Gold 23 84 -

Computer, electronic, and

9 Ericsson Sweden 2630 87 17.8 Bronze 26 89 -
optical products
Motor vehicles and other
10 Stellantis Netherlands 2910 90 24 - 56 - -
transport
Source: Elaborated by the authors

20
Table 14 illustrates that the Refinitiv ESG Scores are very high for the top 10 ranked companies in the EU R&D
Scoreboard. In fact, excluding Robert Bosch, to which Refinitiv assigns a rating of ‘good’, all the companies are
evaluated as having excellent relative ESG performance and a high degree of transparency in publicly reporting
material ESG data. Regarding the Sustainalytics’ metric, the ESG Risk Rating of all top-ranked companies ranged
between low and medium risk. Notably, none of the best-positioned companies had a rating of ‘negligible’, which
would be the best evaluation. The RRI ranges between medium and high for the top 10 companies; this is not a
significantly positive evaluation. Finally, only five of these companies are included in the S&P Global Sustainability
Yearbook, four in the Global 100 Index, and none among the World’s Most Ethical Companies. Therefore, although
these companies have received high Refinitiv ESG Scores, their evaluations with regard to the other metrics are not
significantly positive.
As a representative example, we can focus on Volkswagen, a top R&D investment company. Table 14 shows that
while Refinitiv evaluates the company as having excellent performance and transparency in their reporting,
Sustainalytics evaluates the company as having a medium risk level and issues it an intermediate rating on its
financial risk scale (see Table 13). S&P Global does not evaluate Volkswagen as one of the best-performing
companies in its industry, as it has been excluded from the Sustainability Yearbook. Meanwhile, in terms of the RRI,
the company receives a high-risk exposure rating owing to ESG factors. Finally, neither of the two analysed indices,
the Global 100 Index and the World’s Most Ethical Companies, includes Volkswagen in their rankings. Therefore,
Volkswagen's final position with regard to these CS metrics is not easy the following sections, we try to better
understand the differences between CS metrics.

4.2 Comparison between the Refinitiv ESG Score and Sustainalytics’ ESG Risk
Ratings
In this section, we compare the two quantitative CS metrics included in this analysis: the Refinitiv ESG Score and
Sustainalytics’ ESG Risk Ratings. First, for each CS metric, we explain which of the 250 top-ranked companies in
the 2021 EU R&D Scoreboard are ranked best by each rating agency and how alternative ESG rankings rate the
same companies. Second, we compare both metrics based on percentiles to draw more generalisable conclusions
about the differences between the two CS metrics.
Table 15 shows the companies ranked best within the sample according to the Refinitiv ESG Scores. Most of these
top-ranked firms coincide with the top-ranked companies in the EU R&D Scoreboard. In fact, excluding the Italian
company Snam, all the top-ranked companies according to Refinitiv ESG Score are among the top 100 in the EU
R&D Scoreboard (of the 250 included in the initial sample).

Table 15. Refinitiv ESG Best Companies

Refinitiv Sust. ESG

Rank Name Country NACE Industries EU R&D
ESG Scores Risk Ratings
Information and
1 Sap Se Germany 5829 94 8/250 10.8
communication
Motor vehicles and other
2–4 Daimler Germany 2910 93 2/250 11.2
transport

2–4 Intesa Sanpaolo Italy 6419 Financial and insurance 93 48/250 15.4

2–4 Snam Italy 4950 Transportation and storage 93 155/250 15.9

Computer, electronic, and

5–6 STMicroelectronics Netherlands 2611 92 36/250 18.2
optical products

5–6 Signify Netherlands 2740 Electrical equipment 92 95/250 12.6

Computer, electronic, and

7–10 Nokia Finland 2630 91 11/250 12.2
optical products

7–10 Basf Germany 2059 Chemicals 91 18 28.3

Motor vehicles and other

7–10 Volvo Sweden 2910 91 24 22.3
transport
Motor vehicles and other
7–10 Alstom France 3020 91 87 19.0
transport

21
Source: Elaborated by the authors

Additionally, the top seven companies are also companies that have been evaluated as low risk by Sustainalytics’
ESG Risk Rating. However, companies such as Basf and Volvo are considered medium risk in Sustainalytics’ ESG
Risk Ratings but are evaluated very positively by Refinitiv, specifically, as have excellent relative ESG performance
and a high degree of transparency in reporting material ESG data publicly.
Table 16 shows the best-ranked companies in Sustainalytics’ ESG Risk Ratings (i.e. those with the lowest risk). As
shown in this table, there is less overlap with the best-positioned companies in the EU innovation ranking. A clear
case of divergence is seen with the company Cimpress, ranked 241 out of 250 in the 2021 EU R&D Scoreboard.
Sustainalytics evaluates this company very positively, considering it negligible risk, while Refinitiv considers its
situation only as satisfactory relative to ESG performance and moderate relative to transparency in reporting
material ESG data publicly.

Table 16. Best firms in Sustainalytics’ ESG Risk Ratings

Sust. ESG Risk Refinitiv ESG

Rank Company Country NACE Industries EU R&D
Ratings Score
1 Linde Group Ireland 2011 Chemicals 8.2 198/250 87
2 Cimpress Ireland 1812 Paper 8.5 241/250 34
Motor vehicles and
3 Schaeffler Germany 2932 8.8 53/250 80
other transport
Professional and other
4 Accenture Ireland 7490 9.3 55/250 82
services
Information and
5 Vivendi France 6190 9.8 217/250 83
communication
Motor vehicles and
6 Valeo France 2932 10.6 25/250 77
other transport
7–9 Worldline France 6619 Financial and insurance 10.8 135/250 86
Rubber, plastics, and
7–9 Pirelli Italy 2211 10.8 142/250 69
other
Information and
7–9 Sap Se Germany 5829 10.8 8/250 94
communication
Motor vehicles and
10–11 Faurecia France 2932 10.9 31/250 66
other transport
Computers and
10–11 ASML Holding Netherlands 2611 10.9 19/250 79
electronics
Source: Elaborated by the authors

Although Tables 15 and 16 show some illustrative examples of divergences between these two CS metrics, we
present some descriptive statistics considering the entire sample to draw more generalisable conclusions about
the differences between these metrics. Tables 17 and 18 present the primary statistics. In Table 17, it can be seen
that the range of Refinitiv ESG Scores for the companies in the sample is between 30 (the worst) and 94 (the best).
Sustainalytics’ ESG Risk Ratings range between 42 (the worst) and 8.20 (the best). These metrics also differ widely
in mean value and standard deviation, with a mean of 73.58 for the Refinitiv ESG Scores versus 21.11 for
Sustainalytics’ ESG Risk Ratings. Therefore, according to Refinitiv, on average, companies are in a good (almost
excellent) position. However, in terms of Sustainalytics’ ESG Risk Ratings, companies are, on average, at an
intermediate-risk position.
Considering that both indicators differ in terms of methodology and interpretation of values, we can complete the
comparison between these two quantitative CS metrics based on percentile scores calculated as:

Number of companies with a worse value + (number of companies with the same value/2)
Number of companies with a value

We need to consider that, according to the interpretation of Sustainalytics’ ESG Risk Ratings, companies with low-
risk values are positioned as the best, while in terms of the Refinitiv ESG Scores, lower values indicate companies
with lower performance and less transparency. Therefore, to improve compatibility, we assign the best positions to
companies with the lowest risk scores when calculating the percentile positions for Sustainalytics’ ESG Risk Ratings.
With Refinitiv, higher values denote better positions; consequently, we assigned the highest percentiles to

22
companies with the highest score. Once the percentiles were constructed, we calculated the divergence measure
as the difference in the absolute value of a company's position in each ranking. Thus, we ensured a more
homogeneous comparison. Overall, there was a 29.14 percentile difference in the percentile positions of Refinitiv
ESG Scores and Sustainalytics’ ESG Risk Ratings.

Table 17. Basic statistics of CS measures and divergence

Measure Mean Std. Dev. Min. Max.

Refinitiv ESG Score 73.58 Good 13.63 30 94
Sustainalytics’ ESG Risk Ratings 21.11 Medium Risk 6.78 8.20 42
Divergence 29.14 22.92 0.27 97.82
Source: Elaborated by the authors

Table 18 summarises the correlations between the top 250 EU R&D Scoreboard, the two CS metrics, and the
variable created to capture the divergence. Companies better positioned in the EU R&D Scoreboard have
significantly higher values according to Refinitiv (negative correlation, as in the R&D ranking; 1 refers to the best
position and 250, the worst). However, there does not appear to be a significant correlation between the R&D
Scoreboard and Sustainalytics’ ESG Risk Ratings, nor does there seem to be a correlation between the position of
a company in the EU R&D Scoreboard and the existence of greater divergences between the CS measures of
Sustainalytics and Refinitiv.

Table 18. Correlations among the 250 top-ranked companies in the EU R&D Scoreboard, CS measures, and divergence

Refinitiv ESG Scores Sust. ESG Risk Ratings Divergence

Correlation -0.343*** 0.105 -0.092
EU R&D
p-value 0.000 0.149 0.213
Source: Elaborated by the authors

We also analysed whether there are greater divergences between Refinitiv ESG Scores and Sustainalytics’ ESG Risk
Ratings for companies in some industries. Table 19 shows the means of the divergences and average percentile
positions of the companies by industry.

Table 19. Percentiles and divergences by industry

Refinitiv ESG Sust. ESG Risk

Mean of
Industries Freq. S.D. Scores Ratings
divergence
percentiles percentiles
Computers, Electronics, and optical 23 26.01 22.14 54.61 61.61
Motor vehicles and other transportation 22 38.12 24.38 59.50 47.79
Information and communication 20 35.20 22.56 38.75 70.53
Pharmaceuticals 18 26.93 21.40 46.36 36.07
Chemicals 13 27.38 25.61 64.92 45.99
Financial and insurance 13 29.24 22.93 54.79 53.22
Machinery and equipment 13 24.16 18.65 48.54 40.51
Electrical equipment 8 19.81 16.61 59.07 59.99
Professional and other services 9 10.23 9.00 26.00 34.36
Electricity, gas, and steam 6 16.40 14.19 42.66 37.32
Metals 5 34.51 20.98 45.98 23.86
Retail 4 42.87 29.64 37.97 73.51
Textiles, leather, and footwear 4 44.50 29.69 33.76 75.00
Transportation and storage 4 16.65 16.67 52.99 36.35
Food and beverages 3 11.96 7.31 55.71 43.75
Mining 3 52.26 18.00 69.20 16.94
Rubber, plastics, and other non-metallic minerals 5 38.37 24.18 64.08 66.68
Agriculture 2 26.91 1.92 29.08 2.18
Construction 2 34.24 0.39 61.69 27.45

23
 Other manufacturing 2 51.77 42.08 39.68 69.43
Water supply 2 12.91 0.20 45.66 45.51
Wood and paper 3 37.49 52.55 31.43 59.15
Source: Elaborated by the authors

As we can see in this table, according to Sustainalytics’ ESG Risk Ratings, agriculture is the most financially risky
industry, although only two companies from this industry are included in our sample. In terms of Refinitiv ESG
Scores, inferior companies in terms of ESG performance and transparency are those in professional and other
services, followed by agriculture. According to Sustainalytics’ ESG Risk Ratings, the less risky companies are those
in textiles, leather, and footwear; the Refinitiv ESG Scores suggest that the companies with better ESG performance
and transparency are those in the mining industry. However, only three companies represent this industry in our
sample. Therefore, these data should be interpreted with caution, as there are only a small number of companies
representing each industry. Regarding the analysis of the differences between the two metrics, if we focus on the
industries most represented in the sample (at least 10 companies in the sample), we see that the greatest
differences are for motor vehicles and other transportation because companies in these industries vary on average
by 38 in percentile positions between measures.
Finally, Table 20 includes the companies with the largest divergence in their percentile positions between Refinitiv
ESG Scores and Sustainalytics’ ESG Risk Ratings. As can be seen, the largest difference is for the company Cimpress,
which is at the top in terms of possible positive evaluations showing negligible risk (percentile 99.18) according to
Sustainalytics’ ESG Risk Ratings but is among the inferior companies in terms of its Refinitiv ESG Score, showing
only a satisfactory level of performance and transparency (percentile 1.3). In contrast, Bayer is relatively well
ranked in Refinitiv (percentile 93.48) but is poorly ranked in Sustainalytics’ ESG Risk Ratings (percentile 10).
These differences are unsurprising since Refinitiv ESG Scores aim to measure a firm's ESG performance and degree
of transparency in reporting material ESG data publicly, while Sustainalytics’ ESG Risk Ratings are created as the
aggregation of the unmanaged risk scores of individual material ESG issues with a potentially significant impact
on the economic value of a company. Therefore, while the Refinitiv ESG score focuses on ESG performance (the
impact of the company on the natural environment and society), Sustainalytics is centred on the impact of ESG
issues on the company's economic performance. The two metrics are very different in their conceptualisation and
the aim they pursue, so the differences in the positioning of the companies analysed are logical.

24
Table 20. Largest divergences in relative positions between Refinitiv ESG Scores and Sustainalytics’ ESG Risk Ratings

Refinitiv ESG Score Sustainalytics’ ESG Risk Ratings

Company Country NACE Industries Divergence EU R&D
Value Percentile Legend Value Percentile Legend

Cimpress Ireland 1812 Paper 97.82 34 1.36 Satisfactory 8.5 99.18 Negligible 241/250

Hexagon Sweden 4690 Retail 82.88 53 10.33 Good 11.7 93.21 Low 63/250

Bayer Germany 2120 Pharmaceuticals 82.88 90 93.48 Excellent 29.9 10.6 Medium 3/250

CD Projekt Poland 3240 Other manufacturing 81.52 40 2.99 Satisfactory 14.1 84.51 Low 220/250

Basf Germany 2059 Chemicals 79.62 91 95.65 Excellent 28.3 16.03 Medium 18/250

Information and
Ubisoft Entertainment France 6201 72.55 56 13.32 Good 13.8 85.87 Low 33/250
communication

Machinery and
Siemens Germany 2811 72.02 86 82.07 Excellent 30.1 10.05 High 7/250
equipment
Motor vehicles and
Faurecia France 2932 71.74 66 22.83 Good 10.9 94.57 Low 31/250
other transport

Financial and
KBC Groep Belgium 6420 72.20 63 19.02 Good 12.8 91.03 Low 111/250
insurance

Computers,
Barco Belgium 2630 electronics, and 72.20 62 17.66 Good 13.2 89.67 Low 227/250
opticals
Source: Elaborated by the authors

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4.3 Divergences and other CS metrics
Having detected the differences between the two quantitative CS metrics (Refinitiv ESG Scores and
Sustainalytics’ ESG Risk Ratings), in this section, we analyse the extent to which these two quantitative measures
converge with other CS metrics. Specifically, on one hand, we examined how these two CS metrics relate to
media exposure of ESG issues measured with the RRI. On the other hand, we checked if the companies included
in the S&P Global Sustainability Yearbook, Global 100, and World’s Most Ethical Companies (for 2021) had
better Refinitiv ESG Scores and Sustainalytics’ ESG Risk Ratings than those excluded from these indicators and
indices.
First, focusing on RRI media exposure, Table 21 presents the top 10 companies with greater ESG risk exposure
according to the RRI and their position in the 2021 EU R&D Scoreboard. We can highlight that most of the
companies with a higher risk of media exposure are among the top 100 companies in the EU R&D Scoreboard,
including Volkswagen, which is ranked first, and Bayer, which is ranked third.
By analysing the Refinitiv ESG Scores, it is possible to notice in this table that the companies with higher ESG
risk exposure in the media are evaluated as excellent by Refinitiv. This trend can be rationalised if we consider
that companies that receive more ESG attention are also those that pay more attention to their ESG
performance and reporting transparency. In fact, the probability of the financial impact of ESG factors is greater
for these companies; in other words, the financial materiality of the ESG factors is higher. This finding aligns
with previous studies showing a positive correlation between media or stakeholders’ exposure and CS
performance and disclosure (e.g. Michelon, 2011).
Finally, Table 21 illustrates that the top-ranked companies according to the RRI coincide with those that have a
medium risk of ESG issues according to Sustainalytics’ ESG Risk Ratings.

Table 21. Top-ESG attention, RRI (higher risk)

RepRisk Refinitiv Sust. ESG

Rank Company Country NACE Industries EU R&D
Index (RRI) ESG Scores Risk Ratings
Electricite de Electricity, gas, and
1–2 France 3511 61 56/250 75 20.3
France steam

1–2 Bayer Germany 2120 Pharmaceuticals 61 3/250 90 29.9

3–4 TotalEnergies France 0610 Mining 59 52/250 85 29.1

Financial and
3–4 Deutsche Bank Germany 6419 59 41/250 82 28.6
insurance
Motor vehicles and
5 Volkswagen Germany 2910 58 1/250 85 29.7
other transport
Motor vehicles and
6 Stellantis Netherl. 2910 56 10/250 90 24
other transport
Electricity, gas, and
7 Iberdrola Spain 3511 55 103/250 86 20.5
steam

8–11 Philips Netherl. 2751 Electrical equipment 54 2/250 86 23.4

8–11 Basf Germany 2059 Chemicals 54 18/250 91 28.3

8–11 Ahold Delhaize Netherl. 4711 Retail 54 98/250 80 20.8

8–11 Eni Italy 0610 Mining 54 161/250 84 27.5

Source: Elaborated by the authors

Table 22 presents the bivariate correlations for a more general difference analysis. The positive and significant
correlation between the CS metrics of Refinitiv and Sustainalytics and the RRI confirms that companies with a
higher ESG performance score and higher level of risk coincide with those that receive more media risk exposure.
In addition, the divergence between the two metrics was greater for companies that received more media
exposure. We also found an interesting relationship between the RRI and the position of companies in the 2021
EU R&D Scoreboard; specifically, we noticed that media exposure was higher for companies ranked at the top
of the R&D Scoreboard (first positions in the rankings).

26
Table 22. Correlations between RRI and other CS metrics

Refinitiv ESG Score Sustainalytics’ ESG Risk Ratings Divergence EU R&D

Correlations 0.39*** 0.14* 0.17* -0.38***

RepRisk Index (RRI)
p-value 0.000 0.049 0.023 0.000
Source: Elaborated by the authors

Finally, we checked whether the companies included in the S&P Global Sustainability Yearbook, Global 100, and
the World’s Most Ethical Companies received consistently better evaluations according to their Refinitiv ESG
Scores and Sustainalytics’ ESG Risk Ratings. We used the Kruskal-Wallis test, which provides a nonparametric
alternative to one-way ANOVA, as the variables analysed do not validate the assumption of equal variances.
The Kruskal-Wallis test checks the null hypothesis of equal population medians (Hamilton, 2006). Table 23
summarises the means and sum rank used to perform the Kruskal-Wallis tests for the included and excluded
companies.
Regarding the S&P Global Sustainability Yearbook, 54 of the 184 companies in the sample were included in the
yearbook. Both the Refinitiv ESG Scores and Sustainalytics’ ESG Risk Ratings show congruent average values
for the companies included in the S&P Global Sustainability Yearbook. Specifically, companies included in the
S&P Global Sustainability Yearbook have higher performance and transparency scores in Refinitiv (81.05 for
included companies vs. 70.48 for excluded companies) and lower financial risk (18.78 for included companies
vs. 22.07 for excluded companies). In both cases, the Kruskal-Wallis test indicated that the difference in
medians between the companies included and excluded in these indices was significant.

Table 23. Refinitiv ESG Score, Sustainalytics’ ESG Risk Ratings, S&P Global Sustainability Yearbook, Global 100, and the
World’s Most Ethical Companies

Refinitiv ESG Scores Sust. ESG Risk Ratings

CS measure
Freq. Mean Rank sum Mean Rank sum
S&P Global Sustainability Yearbook
Included 54 81.05 6,711.50 18.78 4,064.50
Excluded 130 70.48 10,308.50 22.07 13,890.50
Sig. Kruskal-Wallis test 0.000 0.002
Global 100 index
Included 23 81.87 2881.50 17.78 1,507.00
Excluded 161 72.4 14,138.50 21.69 15,513.00
Sig. Kruskal-Wallis test 0.002 0.009
The World’s Most Ethical Companies
Included 8 80.75 965.00 16.63 475.50
Excluded 176 73.26 16,055.00 21.31 16,544.50
Sig. Kruskal-Wallis test 0.127 0.073
Source: Elaborated by the authors

In the case of the Global 100 Index, only 23 of the 184 companies were included in the ranking. Like with the
companies included in the S&P Global Yearbook, the evaluation in terms of both the Refinitiv ESG Scores and
Sustainalytics’ ESG Risk Ratings of companies included in the Global 100 shows congruence, as companies
included in the Global index have better performance and transparency and less financial risk associated with
ESG. In both cases, the Kruskal-Wallis test indicated that the difference in medians between the companies
included and excluded in these indices was significant.
Finally, the World’s Most Ethical Companies shows little similarity in terms of the ranking of the top-ranked
European companies in R&D, as it includes only eight out of the 184 companies analysed. Although very few of
the top EU R&D companies were included in this index, there is congruence with both measures, as companies

27
included in this index show higher performance and transparency and less financial risk. However, in this case,
the differences in medians between the included and excluded firms are not significant for the Refinitiv ESG
Scores and have less significance than the other index for Sustainalytics’ ESG Risk Ratings.
Therefore, we can conclude that for the sample, both the Refinitiv ESG Scores and Sustainalytics’ ESG Risk
Ratings show consistency in their valuations with the S&P Global Sustainability Yearbook, the Global 100 Index,
and the World’s Most Ethical Companies. Such consistency might be explained by the fact that the indices
consider good performance and transparency in ESG factors, as does Refinitiv, as well as the company’s level
of risk, which is the main measurement factor of Sustainalytics’ ESG Risk Ratings.

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5 Discussion and conclusions
This study aimed to contribute to greater homogenisation in the measurement and reporting of CS practices.
First, we attempted to understand the current trend in CS reporting among the most innovative companies in
the EU. Specifically, we performed text analyses to identify trends in terms of the use of terminology to refer
to CS issues, EU regulations acknowledged, most cited international sustainability frameworks, ESG ratings and
indices mentioned, the ESG KPIs used, and the CS materiality approaches adopted. Furthermore, we analysed
the most popular metrics to measure CS performance by assessing their similarities and differences for the
most innovative EU companies. The comparative analysis of the Refinitiv ESG Scores, Sustainalytics’ ESG Risk
Ratings, S&P Global Sustainability Yearbook, RRI, Global 100 Index, and the Top 100 World’s Most Ethical
Companies enabled us to draw interesting conclusions about the diversity and incongruencies that currently
exist in CS metrics.
First, focusing on the most interesting aspects related to trends in CS reporting, we can draw the following
conclusions:
• In 2021, there was great diversity in terms of how companies reported their CS information (integrated
with financial information, in separate documents, or both) and how companies named these reports.
Our text analysis illustrates that CS information is most commonly presented in a separate document.
The most commonly used title for this document is ‘sustainability report’, although it was only used by
29.41% of the companies, which indicates great levels of heterogeneity.
• SDGs was the most common term used in the 2021 reports to refer to CS aspects, followed by the
term ESG. Surprisingly, the most traditional and academic term, CS, was not referenced as much. This
trend seems to confirm the increasing popularity of SDGs as the main framework of action to integrate
sustainability at the firm level (Delgado-Ceballos et al., 2023; Montiel et al., 2021). It also indicates
the prominence gained by the term ESG, which was originally coined by finance academics and
practitioners and later extended to the general business field to refer to sustainability actions and
performance (Antolín-López and Ortiz-de-Mandojana, 2023).
• Among EU regulations, the EU Taxonomy is receiving significant attention in the CS of companies, with
66.39% of the companies including references to it in their 2021 report. Notably, 14.29% of the
companies mentioned the CSRD. This finding foresees great relevance of the EU Taxonomy in the
business field, given that it is still a proposal in the development stage. This finding also shows the
proactivity of some of the companies in the sample.
• Regarding the general international sustainability frameworks, we observe a similar trend with regard
to the CS terminology, since SDGs were the most referenced framework in the analysed CS reports of
the companies. The GRI was the second most frequently referenced framework, which is
understandable since it is an international standard specifically developed for corporate reporting and
disclosure of companies’ sustainability actions. The other two frameworks with a notable presence in
the CS reports were the UNGC and SASB. Hence, although there is much freedom in the selection of
sustainability frameworks to disclose CS information, most companies focus only on a few
international frameworks (i.e. SDGs, GRI, UNGC, and SASB). Regarding specific sustainability
frameworks, those related to the environment (i.e. CDP, GHG, SBTi, and TCFD) are cited more frequently
than frameworks related to the social dimension. The number of references among sustainability
frameworks related to the environment was very similar. Regarding the social dimension, references
to the UDHR exceed references to the ILO in number.
• Unexpectedly, although rating agencies have played a very relevant role in the development of CS
measures, references to rating agencies and their metrics and indices are scarce in companies’ CS
reporting.
• Among the most used environmental KPIs, the most common are the references to ‘emissions’.
Additionally, indicators related to energy, such as ‘energy efficiency’ and ‘renewable energy’, are
referenced frequently. There are also numerous allusions to the broader but related concept of ‘climate
change’. However, considering our sample of innovative firms, it is worth noting the negligible presence
of innovation-related indicators, such as ‘environmental/sustainable innovation’ and ‘green products’.
Regarding the social KPIs, the most common indicators are those related to employees, such as ‘health’,
‘health and safety’, ‘working conditions’, and ‘diversity’. This might be explained by the importance
health and well-being has gained recently owing to the Covid-19 pandemic. References to ‘human
rights’ are also very common, which is reasonable because they reflect a general perspective of the

29
 company's respect for all stakeholders, and it is one of the most deeply rooted CSR aims. Finally, of
the governance KPIs analysed, the most frequently occurring one is ‘risk management’, which indicates
the general inclination of companies to pay attention to ESG aspects that have a particular risk of
impact on the company. This finding aligns with the growing presence of financial materiality in both
finance and business fields (Antolín-López & Ortiz-de-Mandojana, 2023). References to more
traditional governance terms, such as ‘anti-corruption’ and ‘ethics’, are also very common in CS
reporting.
• Although references to materiality are still limited, companies reference ‘financial materiality’ more
than ‘sustainable materiality’ (21.34% vs. 12.97%). This finding is supported by the fact that the
concept of materiality first appeared in the finance field (Jebe, 2019). The expression ‘double
materiality’ only appears in 15.90% of the documents, which is striking, given the prominence and
urgency granted to double materiality in the Guidelines on Reporting Climate-Related Information
(2019) to clarify the application of the NFRD.
Second, with respect to the analysis of the CS metrics for top-ranked companies in the EU R&D Scoreboard, we
can draw the following conclusions:
• Companies better positioned in the EU R&D Scoreboard are evaluated significantly higher according to
their Refinitiv ESG Scores. However, there does not seem to be a significant correlation between the
top 250 companies in the EU R&D Scoreboard and Sustainalytics’ ESG Risk Ratings.
• The metrics, Refinitiv ESG Scores and Sustainalytics’ ESG Risk Ratings differ in how they evaluate
companies and their CS performance. Therefore, each rating agency places different companies in the
top positions, i.e. the best ranked companies according to these two CS metrics differ greatly. This
result might be explained by the fact that while the Refinitiv ESG Score evaluates ESG performance
and the degree of transparency in reporting material ESG data publicly, Sustainalytics’ ESG Risk Ratings
only focus on the evaluation of the financial risk associated with the company's ESG factors. Both
measures are very different in their conceptualisation; therefore, the differences in positioning are
reasonable. These differences are not greater for companies that are better or worse positioned in the
EU R&D Scoreboard.
• Companies most exposed to the media, as measured by the RRI, are evaluated as excellent by Refinitiv
(the highest score category). This may be because companies that receive more ESG attention are
under major public scrutiny and care more about their ESG performance and the transparency of their
ESG reporting. Using correlations, we confirmed that companies with a higher Refinitiv ESG Score and
a higher Sustainalytics’ ESG Risk Rating coincide with those that receive more media exposure. We also
found a very interesting relationship between companies’ RRI and their position in the 2021 EU R&D
Scoreboard. Companies ranked at the top of the R&D Scoreboard faced greater media exposure.
• Not many of the top-ranked companies in the EU R&D Scoreboard are included in the S&P Global
Sustainability Yearbook, the Global 100, or the World's Most Ethical Companies.
• Although there are divergences between Refinitiv ESG Scores and Sustainalytics’ ESG Risk Ratings,
these two metrics separately show congruence with the three indices analysed (S&P Global
Sustainability Yearbook, the Global 100, and the World's Most Ethical Companies). This finding can be
explained by the fact that these indices are constructed based on companies' ESG performance and
their level of transparency in ESG reporting (the two measurement pillars of Refinitiv) as well as their
level of risk (the main aim of Sustainalytics’ ESG Risk Ratings).
This study has some limitations. First, the sub-samples included only 238 and 184 companies. This is because
part of the analysis required a manual and detailed data search. We focused on highly innovative companies
that can present a good image in terms of openness to the environment and change. However, future work
could include larger sample sizes, including less recognised or less scrutinised companies. In addition, together
with EU companies that can be considered pioneers in the field of measuring and reporting CS, companies from
other geographical contexts could be incorporated to obtain a more global picture of the situation. Second, the
objective of this work was mainly descriptive, and more complex methodologies should be designed and applied
to investigate the causality of many of the results, trends, and other uncovered effects found in this report.
Furthermore, this study focused on the year 2021. However, in the coming years, we expect important advances
in terms of CS measurement and reporting, given the global changes occurring in terms of regulations, ratings,
and so on. Therefore, these analyses should be repeated in the future to evaluate progress.

30
Despite these limitations, we believe that this study has enabled us to learn about some of the current trends
in corporate reporting and to identify and justify some of the divergences that occur when measuring CS.
However, the most important trends detected refer to the lack of homogeneity in the naming of the documents
that present and integrate CS information, which can easily be solved by establishing clearer recommendations
and global standards. This would enable stakeholders to locate this information more easily, thereby improving
access and transparency in terms of CS reporting and the benchmark of companies. We also believe that despite
great flexibility, only a few international sustainability framework standards have significant prominence, as
they favour standardisation. KPIs are a key aspect in advancing quality in reporting and should be more
standardised, at least the most relevant ones. Additionally, it is important to differentiate between the levels of
different KPIs and make KPIs more actionable for measurement (for example, emissions vs. climate change).
EU regulations such as the EU Taxonomy will help achieve this goal. Companies must understand and clarify
the double materiality of their activities, i.e. their CS measurement and reporting must allow for the
identification of not just the impacts social and environmental issues may have on their financial aspects, but
also the impact the company has on global sustainability. Finally, there are many measures for assessing the
CS performance of companies, each constructed using a different methodology and set of assumptions. The
value of these tools depends on whether the stakeholder uses them to gain a thorough understanding of the
assumptions on which each CS measure is built and what each measure represents. Some CS metrics can be
used in a supplementary manner, given that the approach and focus of existing CS metrics differ considerably.
We hope that in the future, greater standardisation will be developed in measurement and reporting. This could
translate into greater clarity and standardisation in CS measurements, allowing for more effective comparison
between companies and improvement of their monitorisation and evolution. Eventually, it could ensure greater
sustainability in companies.

31
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List of abbreviations and definitions
CS Corporate Sustainability
CSR Corporate Social Responsibility
CSRD Corporate Sustainability Reporting Directive
DJSI Dow Jones Sustainability Indices
ESG Environmental, Social, and Governance
EU European Union
GRI Global Reporting Initiative
KPIs Key Performance Indicators
ILO International Labour Organization
MEIs Material ESG Issues (MEIs),
NFRD Non-Financial Reporting Directive
RRI RepRisk Index
SASB Sustainability Accounting Standards Board
SDGs Sustainable Development Goals
SFDR Sustainable Finance Disclosures Regulation
S&P Standard & Poors
UNGC United Nations Global Compact

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List of tables
Table 1. Country distribution in the 250 EU R&D Scoreboard and both sub-samples ..........................................................6
Table 2. Industry distribution of the 250 top-ranked companies in the EU R&D Scoreboard and the two sub-
samples .....................................................................................................................................................................................................................................7
Table 3. Name heterogeneity in CS-related reports....................................................................................................................................8
Table 4. CS terminology frequency counts ................................................................................................................................................... 10
Table 5. Frequency counts of most commonly used CS terms ........................................................................................................ 10
Table 6. Frequency counts of types of EU regulations .......................................................................................................................... 11
Table 7. Frequency counts of international sustainability frameworks...................................................................................... 12
Table 8. Frequency counts of ESG ratings and indices ......................................................................................................................... 13
Table 9. Frequency counts of environmental KPIs in CS reporting ................................................................................................ 14
Table 10. Frequency counts of social KPIs in CS reporting ................................................................................................................ 15
Table 11. Frequency counts of corporate governance KPIs in CS reporting ............................................................................ 15
Table 12. Frequency counts of materiality terms .................................................................................................................................... 16
Table 13. ESG metrics and other indicators levels and qualitative meanings ....................................................................... 18
Table 14. ESG indicators of the 10 best ranked European companies in the 2021 EU R&D Investment
Scoreboard .......................................................................................................................................................................................................................... 20
Table 15. Refinitiv ESG Best Companies ........................................................................................................................................................ 21
Table 16. Best firms in Sustainalytics’ ESG Risk Ratings .................................................................................................................... 22
Table 17. Basic statistics of CS measures and divergence ................................................................................................................ 23
Table 18. Correlations among the 250 top-ranked companies in the EU R&D Scoreboard, CS measures, and
divergence............................................................................................................................................................................................................................ 23
Table 19. Percentiles and divergences by industry ................................................................................................................................. 23
Table 20. Largest divergences in relative positions between Refinitiv ESG Scores and Sustainalytics’ ESG Risk
Ratings ................................................................................................................................................................................................................................... 25
Table 21. Top-ESG attention, RRI (higher risk)............................................................................................................................................ 26
Table 22. Correlations between RRI and other CS metrics ................................................................................................................. 27
Table 23. Refinitiv ESG Score, Sustainalytics’ ESG Risk Ratings, S&P Global Sustainability Yearbook, Global
100, and the World’s Most Ethical Companies............................................................................................................................................. 27

35
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