Social Market Analytics released U.S. Machine Readable Filings (MRF) in partnership with S&P Global Market Intelligence in April 2020. Machine Readable Filings is the first product to provide parsed textual data of SEC Edgar Regulatory Filings at the Document, Part, Item, Section, and Notes level with historical baselines back to 2006. Global Machine Readable Filings (GMRF) was released in April 2021 in partnership with S&P Global Market Intelligence. Global Machine Readable Filings provides parsed textual data of international companies’ Annual, Semi-Annual, Quarterly Reports and Financial Supplements across ~1.6M documents spanning over 200 countries. Based on client demand, we expanded our technologies to an emerging set of document types: Environmental, Social, and Governance (ESG) Reports.
We are excited to release the next iteration of Machine Readable Filings. Our ESG data pack contains all ESG reports. There are five types of ESG reports: Sustainability Reports, Corporate Social Responsibility Reports (CSR), Corporate Governance Reports, Environmental Reports and Task Force on Climate-Related Financial Disclosure (TCFD) Reports.
ESG Reports offer additional perspective to traditional corporate documents such as Annual Reports and SEC filings. Traditional corporate documents reflect the past year or quarter, ESG reporting has a forward-thinking perspective. Trends in ESG initiatives can impact investing decisions.
With SMA parsing technology, these magazine-style documents are parsed according to the structure of the underlying document with text organized in a multi-level JSON format. This makes it possible to run advanced textual analytics such as advanced word searches, comparisons/ red-lining, sentiment, word counts and more.
ESG reporting has become a priority for companies in recent years. The below percentages illustrate the importance of ESG initiatives to the largest companies in the world.
- 99.2% of the Top 500 Market Cap U.S. companies have filed at least one ESG report in the last 5 years
- 96.6% Top 500 Market Cap Global (Ex U.S.) companies have filed at least one ESG report in the last 5 years
- 99.2% of MSCI’s Top 500 Market Cap companies have filed at least one ESG report in the last 5 years
Below is a detailed description of each document type with examples:
Sustainability Reports (19,222 documents): We see similarities in ESG goals based on a company’s industry. For example, within the food and hospitality industry, there is a huge focus on more sustainable packaging and sourcing ingredients closer to factories.
- Sustainability Reports are the disclosure and tracking of ESG goals. Benefits include building customer confidence, improved corporate reputation, and improved risk management.
- There are four steps in this reporting process: Define goals and metrics, measure progress, evaluate progress and manage progress
- Popular headings include: “governance”, “stakeholder engagement”, “environment”, “employees” and “risk management”
- Top Countries reporting this document type:
- US (16.1% of SR universe)
- Hong Kong (9.7% of SR universe)
- China (8.1% of SR universe)
- Japan (6.9% of SR universe)
- Brazil (3.6% of SR universe)
- Top sectors reporting this document type:
- Industrials (20.3% of universe)
- Materials (18.8% of universe)
- Financials (13.7% of universe)
- Consumer Discretionary (13.5% of universe)
- Consumer Staples (10.0% of universe)
- Example from CVS Health Corporations 2021 Sustainability Report regarding their sustainable packaging goals:
Corporate Social Responsibility (CSR) Reports (12,614 documents): While analyzing these documents, there was a strong emphasis on increased transparency, as well as ways to give back to their local communities, both physically and virtually.
- CSR reports communicate a company’s impact on their communities and the environment.
- CSR efforts can fall into four categories: Environmental, Ethical, Philanthropic and Economic
- Popular headings include: “corporate governance”, “employees”, “human rights”, “compliance” and “health and safety”
- Top Countries reporting this document type:
- Japan (22.5% of CSR universe)
- US (18.4% of CSR universe)
- China (17.0% of CSR universe)
- Taiwan (10.8% of CSR universe)
- United Kingdom (3.9% of CSR universe)
- Top sectors reporting this document type:
- Industrials (24.3% of universe)
- Financials (19.7% of universe)
- Consumer Discretionary (14.9% of universe)
- Information Technology (14.7% of universe)
- Materials (11.8% of universe)
- Example of Apple Inc.’s Environmental Strategy from their 2021 CSR Report:
Corporate Governance Reports (18,821 documents): While analyzing these documents, there was a strong emphasis on internal Diversity, Equity, and Inclusion initiatives, as well as addressing how their operations are contributing to the climate change risk.
- Corporate Governance reporting allows companies to communicate how they’re monitoring decisions, business practices/policies, and actions
- Four major sections within these documents: Corporate Strategy, Executive Compensation, Risk Oversight, and Transparency
- Popular headings include: “Capital Structure”, “Corporate attributes”, “reasons for adoption of current corporate governance system”, “organizational composition and operation”, and “remuneration committee”
- Top Countries reporting this document type:
- Japan (62.7% of CG universe)
- India (9.9% of CG universe)
- Australia (4.9% of CG universe)
- Sweden (2.9% of CG universe)
- Italy (1.6% of CG universe)
- Top sectors reporting this document type:
- Industrials (22.3% of universe)
- Consumer Discretionary (18.6% of universe)
- Information Technology (12.0% of universe)
- Materials (11.1% of universe)
- Financials (10.5% of universe)
- Example of Risk Oversight in Autosports Group’s 2019 Corporate Governance Report
Environmental Reports (2,760 documents): While analyzing these documents, there was a strong emphasis in the manufacturing industry surrounding supply chain sustainability and introducing future “Net-zero” emission initiatives.
- Environmental Reporting allows companies to make better decisions about how they manage their natural resources and set environmental policy
- Four major areas highlighted in these reports include: Purpose and Need of Proposal, Anticipated Action and Alternatives, Affected Environment, and Expected Impacts
- Popular headings include: “emissions data/ breakdowns”, “energy”, “business strategy”, “carbon pricing” and “engagement strategy”
- Top Countries reporting this document type:
- Japan (31.7% of ER universe)
- US (19.8% of ER universe)
- United Kingdom (8.0% of ER universe)
- Canada (3.8% of ER universe)
- Germany (2.4% of ER universe)
- Top sectors reporting this document type:
- Industrials (24.1% of universe)
- Materials (16.9% of universe)
- Financials (16.0% of universe)
- Consumer Discretionary (14.9% of universe)
- Information Technology (11.7% of universe)
- Proposed action from McDonald’s 2020 Environmental Report to make their franchises more sustainable:
TCFD Reports (432 documents): While analyzing this document type, there was a strong emphasis on managing climate-related risks and identifying opportunities on how to improve suppliers and the company’s operations in the short, medium, and long-term.
- Assess climate-related risks to a company, its suppliers, and competitors in order to make decisions on capital allocation
- Key elements of a TCFD Report: Governance, Strategy, Risk Management, and Metrics and Targets
- Popular headings include: “risk management”, “metrics and targets”, “scenario analysis”, “physical risks” and “transition risks”
- Top Countries reporting this document type:
- US (29.2% of TCFD universe)
- Japan (14.8% of TCFD universe)
- Canada (10.2% of TCFD universe)
- Australia (9.0% of TCFD universe)
- United Kingdom (7.4% of TCFD universe)
- Top sectors reporting this document type:
- Financials (43.1% of universe)
- Materials (16.7% of universe)
- Industrials (14.4% of universe)
- Utilities (11.8% of universe)
- Energy (11.1% of universe)
- Governance disclosure example from Xerox’s 2021 TCFD Report:
If you are interested in learning more about our MRF products or have a library of PDFs that you are trying analyze, please email us at contactus@socialmarketanalytics.com or schedule a demo using this link.
