More than 80% of the Public Companies in the Middle East and North Africa Do Not Disclose Any Quantitative Sustainability Data
Worldwide, approximately only 30% of public companies disclose at least one quantitative sustainability metric
October 26, 2022 – New York City. Clarity AI, the leading global sustainability tech platform, announced today that in a sample of 40,000 public companies, approximately only 30% report at least one quantitative sustainability metric. As further requirements under the EU’s Sustainable Finance Disclosure Regulation (SFDR) come into force in fewer than 70 days, lack of available reported data may necessitate the use of estimated data in order to fulfill the regulator’s expectation to provide disclosures on a “best effort” basis.
The Middle East and North Africa (MENA) is the region where public companies disclose the least when compared with Europe, North America and Asia Pacific. As mentioned above, Clarity AI looked into 40,000 public companies and assessed how many disclose at least one quantitative metric. The overall disclosure level is 30% (~11,000 public companies reporting), with significant variations across regions. North America is the leader while MENA is the laggard for companies reporting at least one quantitative metric. Clarity AI observed the following levels of reporting:
- North America: 44% of public companies reporting
- Europe: 40% of public companies reporting
- APAC: 20% of public companies reporting
- MENA: 11% of public companies reporting
Even for the two most commonly reported E and S metrics in MENA – GHG emissions scope 1 and scope 2 and percent of women employed, respectively – public companies in MENA disclose six times less than European public companies. Approximately 30% of public companies report GHG emissions scope 1 and scope 2 in Europe, while only 5% do so in MENA. In terms of the percent of women employed, in Europe about 30% of public companies report this data while only 6% do so in MENA.
MENA companies do not just report less often than companies in other regions, they also fall behind in some areas. In contrast to North American and European public companies that have an average ratio of 40% women employed, companies in MENA have a ratio of 30% women employed. And the gap is larger in leadership positions. For example, for every female on a Board of Directors in MENA, we can find three in Europe.
However, MENA doesn’t lag in every area related to the S pillar. In the turnover of employees and the gender pay gap (1) MENA companies lead versus North American and European companies:
- Turnover of employees:
- North America is at 14%
- Europe is at 14%
- MENA is at 10%
- Gender Pay Gap:
- MENA pays women 90% of what they pay to men
- North America pays women 87% of what they pay men
- Europe pays women 83% of what they pay men
On environmental topics, we find a similar pattern: Companies in the MENA region perform as their counterparts in Europe and North America do in some metrics (e.g., energy consumption) but lag behind on others (e,g., CO2 scope 1 and scope 2, waste recycling).
“Public companies worldwide have a long way to go in reporting even the simplest sustainability metrics,” says Patricia Pina, Head of Product Research and Innovation at Clarity AI. “While companies take time to figure out how and what to report, advanced technology and expertise in sustainability can help fill the gaps with machine learning estimation and reliability models.”
(1) We acknowledge that the sample size for both turnover and pay gender gap in MENA is small (<60) and these conclusions should be interpreted with caution. Our sample could disproportionately contain the best performing companies in the region. However, this effect is likely to occur to some scale in all regions.