SOURCE: The Corporate Library

December 05, 2007 09:37 ET

Environmental, Governance, and Disclosure Factors Identify Companies Most at Risk for Shareholder Litigation

PORTLAND, ME--(Marketwire - December 5, 2007) - The Corporate Library's latest study "Whose Carbon Footprint is Too Big for Their Corporate Boot?" is a groundbreaking report identifying those carbon-intensive companies that may be most at risk for shareholder litigation by measuring a range of governance factors.

ESG (Environmental, Social and Governance) variables are now recognized factors in risk analysis; however, this information is often difficult to capture. To address this need The Corporate Library has partnered with Trucost to create a first of its kind assessment of the connection between the E and G factors in the context of securities litigation. The assessment awarded points for characteristics that would reduce possible litigation risk among carbon-intensive companies. The study found that the electric utility industry scored highest on disclosure measures, and companies from the oil equipment and services, recreational services and railroad industries scored the worst on disclosure. Electric utility American Electric Power, scored highest overall, with top scores in both governance and disclosure. Tied for the lowest overall score were Tidewater Inc. and Seacor Holdings Inc., both oil equipment and services companies, and Burlington Northern Santa Fe Corp., a railroad.

The report evaluated the disclosure practices and governance arrangements of 24 Russell 1000 companies with especially carbon-intensive businesses. These companies were then rated on their governance arrangements relating to their exposure to climate change. Governance factors taken into account ranged from the presence of an environmental expert on the board to environmental performance metrics for executive officers.

"In light of the attention now being paid to climate change," said study author Beth Young, "we were surprised at the wide range of practices, including the number of companies that made no disclosures in their SEC filings or on their websites regarding the effect of climate change and regulations adopted to mitigate it."

The report is available from The Corporate Library's online store at Review copies may be made available to members of the press on request.

About The Corporate Library

The Corporate Library provides independent corporate governance research and analysis to enable its clients to enhance value. The company's line of corporate governance information products, research services and data are sold to many of the world's leading corporate governance stakeholders. Leading-edge corporate governance research is created by industry thought-leaders using a proprietary database of governance and compensation information on over 3,000 public companies and over 30,000 executives and directors. Additional information on The Corporate Library and its suite of online corporate governance data and analysis products and custom research services can be found on its website at

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