As companies have been called upon to be responsible to a broader set of stakeholders than just financial investors, the concept of ESG (or Environmental, Social and Governance) has become a central framework for measuring their non-financial contribution to society. Increasingly, companies are being asked to demonstrate commitment to ESG goals and one means they have actively employed in recent years is public disclosure in the annual reports.

    As a method of measuring the intensity of ESG disclosure and how it has trended in recent years, HSBC looked at the use of ESG keywords (see appendix for the list broken down by category). We find that the overall use of ESG keywords have gone up, the use of unique mentions of key words have gone up and we find strong patterns across industries. Specifically, we find keyword usage that is consistent with the level of societal concern that might be reasonably expected (for instance energy and utilities have high levels of environmental key word usage).

    HSBC ESG Keyword Analysis

    We have applied NLP based text search on the annual filings of S&P 500 companies from 2014 to 20201 to measure ESG keyword usage. The text search is done on filings stored in EDGAR as html files. We search for 47 keywords. The results show an increase in mentions of E, S and G keywords over the period of analysis, signifying the rise of importance accorded to ESG themes in annual filings.

    Count of Keywords 2014 2020 % Change
    E 21,343 22,654 6%
    S 1,282 1,502 16%
    G 3,600 4,067 12%
    Total 26,225 28,223 7%


    % of Keywords 2014 2020
    E 81.4% 80.3%
    S 4.9% 5.3%
    G 13.7% 14.4%


    Around 80 per cent of mentions fall under the environmental bucket. But more important to our analysis, we see a meaningful increase in keyword mentions across all 3 categories.

    Sector-wise analysis also reveals specific differences. Industrials, Materials, Energy and Utilities are more focused on environmental issues compared to other sectors. Social and Governance keyword usage shows less discernable patterns across industries.

    The absolute change in the number of corporates reporting a specific keyword from 2014 to 2020 yields interesting results. There is an increase in number of corporates mentioning environmental and governance keywords in their annual filings, with the effect more pronounced in all sectors except Industrials, Material, Energy and Utility. Some of the keywords with increase in mentions are transparency, climate change, sustainability, corruption and remediation.

    The final chart below shows the net increase in the number of S&P 500 companies which mention a given keyword. For instance, the chart tells us that 96 more S&P 500 companies mentioned sustainability in the filings they released in 2020 as compared to the filings this same set of companies released in 2014. Overall, the chart shows that across all companies and all keywords there are 796 more keywords mentioned at least once in a given annual report. This dramatic increase in the usage of certain keywords helps us gain a much better understanding of the ESG message S&P 500 companies are trying to deliver to all their stake holders.


    Keywords identified for analysis


    biodiversity, carbon, carbon negative, carbon neutral, carbon zero, clean-up, climate change, climate positive, contamination, discharge, emission, energy-efficient, environmental, fuel efficiency, greenhouse gas, hazardous, low carbon, natural resource, net-zero emission, pollution, remediation, sustainability, sustainable, toxic, waste, zero carbon, zero net carbon


    consumer protection, customer privacy, employee relation, gender equality, health and safety, human right, labor relation, labor standard, working condition


    antitrust, board independence, code of ethic, corporate culture, corporate governance, corruption, governance risk, political lobbying, scandal, shareholder right, transparency

    1Year reflects when 10K’s are filed with the SEC, not fiscal years. If a 10K is not available in 2020, we use the 2019 10K instead.

    Disclosure and disclaimer

    More, collapsed
    Join the conversation?

    Join our Linkedin group to get an unparalleled view of macro and microeconomic events and trends from a bank that is a leader in both developed and emerging markets.