S&P Global Inc. (SPGI) Earnings Call Transcript & Summary

Good morning, everyone. A big welcome to today's webinar, and thank you for attending. My name is Warrick Fuchsloch, and I work in our specialist client engagement team at Sustainable1, S&P Global. I'm very pleased to be moderating and speaking at today's webinar, insights into the S&P Global Corporate Sustainability Assessment or our acronym for today, the CSA, with a specific focus on the Swiss market. So before we drive straight into it, a few reminders. All of the engagement tools are resizable and movable. You will see all of those on the right of your screen. So you're welcome to move them around and resize them to get the most out of your monitor space. As always, we like to have these sessions as interactive as possible. So please go ahead and send your questions through the Q&A button on the bottom right of your screen. Don't worry about punctuation or spelling. We are the only ones that will see these questions. And if we don't get to them at the end of the session, we will make sure to follow up by mail and answer them as best we can. After the webinar or if you're watching the replay, please make sure to use the related content and additional resources that will be available. Many of the useful links and research articles referenced within this webinar will be available there. Last but not least, A survey will appear at the end of the session. It takes less than a minute to answer, and it really does support us in understanding what you would like to be seeing, what you won't like to see so that we can structure future webinars in future. So to introduce our speakers today, we have Michael Füglister, who covers relationship management and equity issuer relations at the SIX Swiss Exchange. We have Annelies Poolman, who is the Head of Bench -- Sustainability Benchmarking Services at S1. We have Robert Dornau, who heads up our corporate engagement team at Sustainable1 and myself as a senior ESG clients engagement specialist. So without further ado, I'm going to hand over to Michael, who will set the scene for us.

Great. Well, good morning, ladies and gentlemen. On behalf of SIX Swiss Exchange, I would like to welcome you to this webinar on the S&P Global Corporate Sustainability Assessment. So my name is Michael Füglister, and I'm responsible for equity issuer relations at SIX Swiss Exchange. And before we kick this off, I just want to say a few words also why we are offering this webinar to our equity issuers. So SIX Swiss Exchange, we are a financial market infrastructure provider. And as such, we also try to help the listed companies to navigate sustainability in capital markets to disclose sustainability information and to comply with legal requirements, ultimately to increase transparency for investors. And I'm with the Issuer Relations team. So basically the team that supports the listed companies once they are public. And we really try to find different kind of events and informational events that are interesting for our issuers, mainly to ensure that our issuers maintain a high profile with investors, analysts and the media, which is also the reason why we are offering this event today, and we have been offering events on ESG ratings. So last year, we had one on the MSCI and Inrate ESG rating. And we hopefully also will be doing one on Sustainalytics. Then just to set a little bit the context and remind you all of the benefits of why we believe at SIX a good ESG rating is important, obviously, to attract investors and to have better conditions for raising capital and to be -- as a company to be better equipped to face regulatory requirements. And with those reasons, you also have a better reputation, customer loyalty, you can attract and retain talent and you're also more credible with suppliers and customers. Now with these reasons in mind, without further ado, I wish you a very insightful hour. I thank again, S&P for making this happen, and I hand over to Robert Dornau now.

Thank you for the introduction, Michael. Then thank you for SIX for hosting us here. Over 146 listed companies are invited to participate in the CSA. 50 of them do already. And with this presentation today, we hope to convince more of you, if you're attending to see value in participation. What you see here is a very Swiss picture. I took it in Lenzerheide on January 2. It's called a parhelion. You might have seen it in 20 Minuten, taken by other people, if you are in Switzerland. It happens only if special ice crystals form in the sky and if the sun is at the right angle, it's quite impressive to see that in person. For me, it's a reflection of sustainability and all the little efforts that we make, either you within your company or companies together. And if everything comes together at the right point in time, it can create something much bigger and magnificent and I hope that's what motivates us all in working in sustainability. We've seen some changes in sustainability over the last years, and I want to take a step back to kick this off. This is an adaptation of the Gartner Hype Cycle. It is a chart that is typically used for innovation in technology. I saw it adapted to ESG on LinkedIn, and I wanted to use it and point to some key events because I think it's a good representation of what happened and where we are. With COP21 in Paris, there was a big kickoff of after '21 COPS, but really putting climate change on the agenda of corporates together with SDGs and what we saw in the CSA was that many, many companies thought they have a foot in each and every SDG. Everybody was very ambitious on climate, annual reports opened with ESG, and it was really front and center everywhere. They were in the peak of this cycle, commitments by CEOs in Davos to be carbon neutral in 10 years and plastic-free as well and maybe a little bit overcommitting. And as a result of the CEO commitments, we saw sustainability teams grow a lot around the world, but then kicked in the anti-woke movement. And in at least North America, ESG became a term that you don't want to use anymore. budgets were slashed and there was a scaling back on targets, maybe also in your company, you now work with a smaller team on more focused initiatives. And I would say we are now back to where the CSA was for the last quarter century already that we focus clearly on the link between business and sustainability strategies. So in short, I refer to sustainability is back to business. And this is what it should be about. You should address issues that you can address that make business sense for your company on the risk side and on the opportunity side. And on the right here in this box, I quote from a study run by Kearney with 500 CFOs that this is for -- 92% of those 500 CEOs, they want to increase investments in sustainability because they see that it has a business benefit for the company. And they want to increase the use of sustainable materials, how to manage energy, reduce waste and in the top 5 also focus on regulations and ratings. So the CSA has been about the business sense of sustainability for more than 25 years. We address sustainability factors that have an impact on corporate value drivers, an impact on growth, profitability, capital efficiency and risk exposure. And we help you as a participant to understand the link between those issues. I want to illustrate that with an example on human capital and talent and to show you really how sustainability thinking and the link with the business case is front and center of our mind when we develop a new question in the CSA or when we work on existing questions. So in the human capital area, if you increase employee satisfaction, engagement and well-being, and that could be through an initiative that is labeled as sustainable. So you could look at, for example, departments where you have a lot of voluntary turnover and you see that in this department, you have a lot of people at the age where they have children, and there is turnover because you don't provide them the flexibility that they need. So if you put social initiatives in place around flexible working hours, maybe work from home, support of childcare financially or maybe even on site, if you are in a bigger organization and you can do that, people have peace of mind at work, they are engaged. And -- oops, now we have this issue that slides keep jumping. I don't know why. And that results in a lower absentee rate. And through that lower absentee rate, you keep knowledge in your company. You have people that remember why things are done the way they are done, that are able to innovate in your company and you increase productivity, of course, you reduce recruitment costs, et cetera, and that will have an impact on your operating margin. If you are able to innovate more to really leverage your workforce in a better way, you will have advanced technologies and products, hopefully resulting in higher revenues. So this is how we think about the link between sustainability initiatives and the business case for your company. This is illustrated in the CSA through the rationale that we provide with every question to help you understand that business case and also in discussions that you might have in your company to make that clear, then we have an expected approach. Here, it starts with identifying skill gaps, understanding the financial payoffs of your investment in employees -- evaluate performance, et cetera. And then we have performance indicators, could be the pay ratio, could be especially female retention rates, turnover rates, targets and employee engagement. And for the more advanced companies, also the ability to link investment and -- apologies for that jumping, investment into human capital development return on investment, as we call it. All of this is always laid out in the question structure. So -- we're very humble and honored that we were able to provide a value proposition for such a long time. What you see on this page is companies on the left that participate for 25 years or more with us. There's only one in Switzerland in that group. It was two, Credit Suisse and UBS. Now it is only UBS that is listed here. But overall, we have 330 companies participating for 15 or more years. And on the chart on the right, you see how this changed over the last years. Of course, we also have companies that think they know everything now, they value the CSA and they drop out. And we also see them coming back. Last year, 66 companies representing over 1 trillion in market cap that rejoined the CSA. Looking at Switzerland, we invite over 140 companies, a little bit over 50 participate. That is up from 20 companies 4 years ago. So also here, a good improvement. Why do companies participate? Out of those 3,500 that participated last year, we asked them what were their motivations, 1,300 answers. So this is really a substantiated analysis, I would say, of companies that have actual experience with the CSA. And we gave them six options to rank on 1 to 6. What you see here is the top 3. Highest ranking #1 is increase in visibility with sustainability-focused investors through S&P Global Indices, through the scores being available on our platforms and the public website. But most important, also, if you look at ranking 1 to 3 to learn from the results and to help prioritize initiatives. And this is really something that we hear again and again from companies that the value of the CSA starts with the process. Also the third reason, a tool to gain external recognition and also internal recognition to make the value of their sustainability initiatives clear internally, not just with the score itself, but also by understanding how you compare relatively to your peers with the areas that you address in sustainability. Now how do we do that? We have 62 industry-specific questionnaires, up to 50% of the questions are industry specific. What you see here on the left are questions, criteria that we ask in each and every industry, but up to 50%, I will talk about that in the next slide, are specific. The target graph here illustrates how we assess companies, data points are on the most outer ring. These get aggregated into questions, and there's different ways to do that. You always get points for disclosure, but some questions also have performance scoring, then we would look at a trend in your data. We look maybe how you perform against your industry, against certain thresholds. We would look at whether your company sets target and whether you meet targets. There are points independent, setting a target gets your point, meeting the target gets you additional points. And there are points for disclosure and transparency. These aggregated in the middle to the criteria, the dimensions into the total score. And what you see here is the representation of three different industries where you see that there is not just the difference in the weighting. For example, in pharmaceutical, environmental has a rather small weight with just one criterion that is not standard, but across a number of industries, it's product stewardship, but there is a very strong weight on governance and economic and social with very specific questions on the contribution to societal health care, for example, that is specific to pharmaceuticals. In restaurants, then you have questions, for example, in the environmental dimension that apply to restaurants, but also other food and beverage, maybe companies where we look at packaging and sustainable raw materials and then mining and minerals, also specific questions around community relations very specific questions on biodiversity and waste with mineral-specific waste streams, for example. So takeaway here, company gets an industry-specific approach with different weights and different criteria that we consider material for your industry to really help you understand the business case of sustainability in your specific case. Another advantage and USP really of the CSA is that not everything you report has to be public. Only about 64% of the questions require public evidence to score you any points, but 35% of the questions are questions where you get additional points for disclosure. And we do this to allow companies to report on topics where they are not yet ready to put them on the public website or in an annual report, but any investor, any stakeholder asking them about these topics would be informed what they do. So it is a question that allows us to differentiate between a company that has nothing in their public reporting because they do nothing versus a company that is silent in their public reporting, but is doing a lot already in-house. They have policies on the topic. They collect their data, they have KPIs. They have targets that they set. They know where they are against this target, but not comfortable to go out yet, and this company will get a higher score than the company that is silent in the public domain and does nothing. So how does the process work? We invite 13,000 companies globally and about 3,600 participated. Last year, the assessment opens next week, April 1. The questionnaire is then visible to all companies, and you can pick participation windows that best meet your reporting cycle and the availability of the people that you want to involve. It's always 2-month windows starting between April and November. And there is a special offer for companies that participate for the first time. That is you can have S&P Global assess your information that is publicly available first and then you review that and only have to review and add to this first assessment of your most recent information. For companies that participate already last year, they can simply prefill the questionnaire with last year's assessment, and they only need to add information that is new or additional this year. Scores will then be published starting July '25. Always the earlier you submit, the earlier you get your score. And if you want to be considered for the yearbook, there's one cutoff that is end of November participation to be eligible for Yearbook 2026 that will launch in February. Then the whole CSA for those that are new is conducted through a very convenient online platform that we developed and improved over the last 25 years. It's much more than a questionnaire. It's really a project management tool that helps you manage the whole process around the CSA. You can sign up colleagues that you want to work with you on the platform and the process, see where each question is that you worked on in this tree structure. Questions are translated, as you see here, for example, human rights commitment into a number of elements that we want to see in a commitment. So this is the first learning that you see if I have all these, likely I have a good policy. If I'm missing something, it's already the first learning that your policy is not yet complete. And what we see really is that companies use this as a central repository, not just during the assessment cycle, but also after when they get approached by investors. They go back to the portal to see what do we want to answer on this topic, what are the documents that we make available and also how do we rank against peers because we provide that in the benchmarking database that companies have access to, to really see how, how they rank against peers. And if you're a first-timer participating, you get free access to the peer practices database that will point you to examples of companies that are top performers in these questions. So how are the results used? First and foremost, by you as a participant, you get this feedback, as I said, in the benchmarking database, free of charge, participation is free, and this feedback is free. You see your own score down to question level, year-over-year changes, but also how you rank in the industry in percentiles and visualized here against the quartiles of score distribution in your industry. The black line is your industry and your company, and you would see how you progress over time. You see the names of your competitors and their scores, which creates a competitive spirit typically with the subject matter experts that then would like to perform better than their peers. You get a 10-page report that provides a lot of quantitative and some qualitative analysis of your scores, again, broken down to the question level split into the required public questions and the additional disclosure industry distributions visualized. And this same report is also made available to the investor community as a report, but of course, also as data and scores. So this is very important. We ask companies that participate in the feedback survey, how they use the scores and data. And you see here that over half, almost 2/3 say that they use their relative industry position and also their scores proactively in their discussion with the investor community that they know which areas they already perform very well in. They can be more vocal about and areas where they have some homework to do, they are maybe quiet. The yearbook is our top recognition for companies that perform well in the CSA. We have different types of recognitions for your score being in the top 1, top 5% or 10% companies get emblems and they get trophies that we hand out in personal events this year in Europe. We will have a big event for Swiss companies in London, Swiss and Central Europe that we will have at the end of April. So we see that companies use these emblems actively, and we are very happy always to see that in social media, how they proactively report about their recognition in the yearbook and that makes us and companies very happy. So I want to give recognition to a couple of the top performers from Switzerland. Top 1% in the industry are SGS, Sonova and Temenos and Yearbook members. That means they perform in the top 15% of companies in the industry you see listed here. Congratulations if you're on the call, again, from us. And I think that was my last slide. And with that, I hand over. Thank you very much.

Thank you, Robert. Thank you for that insightful overview of the value and the benefits of the CSA and the process. My name is Annelies Poolman. I'm leading the sustainability benchmarking services team. I'm also based in Zurich, but as you can see, working from the home office today. In the next few minutes, I would like to cover how benchmarking your assessment results can help you to advance your sustainability journey. And I would like to start with introducing the benchmarking cycle. This is a recurring cycle that most companies that participate in the CSA go through on a yearly basis. And as you see here, step one is participation in the CSA, measuring your sustainability performance and establishing a sustainability baseline. And for those companies that are not invited to participate in the CSA, we also offer CSA as a service. So whether you're listed company private, small or large, and there's always an opportunity to get your company's sustainability performance assessed through the CSA methodology. Step two in the cycle is benchmarking. As Robert already mentioned, it's important to not only look at your own performance, but also do that benchmark. And when I mean benchmarking, it's not only benchmarking against the peers in your industry, but also benchmarking against the CSA methodology. So benchmarking allows you to get an understanding of what are your strengths, what are your company's areas for improvement. And then the next step, learn from the data, talk to the internal stakeholders, the topical experts and together, based on the results, define what are the strategic objectives, what are the priorities. And finally, step four, take action, closing those gaps. And I would like to highlight here that from this -- those four steps, the first three, we can actually support you. We have the expertise and insights in the CSA methodology to provide services. Step four, we can't be involved. Taking action is something that's up to you to take up. On the next slide, I would like to give a brief overview of our capabilities. First of all, we can offer a qualitative gap analysis. I already mentioned it. This analysis would allow you to get a better understanding of the expected practices of the CSA methodology. What are the actual requirements for each individual data points. But it also allows you to get an understanding of your actual assessment results. What are your weaknesses? What are your strengths? We also offer conversations with CSA experts, allowing you to dive even deeper into the assessment results, had that conversation on how the CSA methodology applies to your business model. Diving deeper into the rationale for each of the questions. Robert already showed some examples on human capital development. But of course, there's a rationale for each question in the CSA for why this is important, why does S&P Global ask these questions. And of course, these conversations can also support you in defining the key topics, key takeaways to inform your top management on your company's sustainability performance and your progress. And last but certainly not least, we also offer benchmarking -- quantitative benchmarking on your CSA scores as well as the individual data points. This allows you to see that peer benchmarking against the industry peers, learn from peer practice examples and really have the opportunity to dive into those granular details of your company's sustainability performance. And while Warrick will talk a bit more about analysis on individual data points, I would like to show some examples of benchmarking on the CSA score level. And on this slide, you see two pretty straightforward examples of analysis that we can offer. First, on the left side, you see a breakdown of the total score into the three dimensions, ES&G. And this shows in another format than what Robert showed before, how the total score, how is it set up and how do the different dimensions, what is their weight. And you see here that the economic dimension has carried the highest weight together with the social dimension. But at the same time, you see that for this company, there's still some room for improvement in those two dimensions. On the right side, it's another example, again, of a graph Robert showed already. You see the company score over time, you see the development here. And at the same time, it allows you a benchmark against the performance of the industry peers. And what's interesting to observe here is that while the company score dropped from 2023 to '24, you see that the overall performance of the top quartile of companies in the industry is actually increasing year-over-year. Now if we have a more granular look at the CSA results, on the left side here, we see the criteria that are part of the governance and economic dimension. And it gives you the potential impact on the total score. So what if you would close all the gaps and meet all the criteria of the questions in a certain criterion, what would be the impact on the total score. And in the bar chart, you see the company's score in black, benchmarked against the industry best and the industry average score. Now briefly on the right side, it's a heat map. And at a glance, you can see the -- for each of the criteria in the assessment, which ones still have highest potential for improvement based on the weighted gap. Now I would also like to briefly present the gap analysis, the qualitative gap analysis. And this is a screenshot of a functionality that's available in the CSA platform. What we see here, it's the question, Scope 1 greenhouse gas emissions. And if we look at the table in the middle, you first of all, see the different aspects or elements that are in this question. And then for each aspect, we explain through the icons, what is the scoring approach? Are we looking for public disclosure? Is the methodology expecting third-party verification? Are you expecting to deliver on an upward or downward trend? Do you need to meet a certain target? All of this is, first of all, shown through the icons, but secondly, explained in the descriptive expected practice. Now the second part of this table actually shows the company's assessment. And again, first of all, for the icons, the green icons show for each of the aspects whether the company met all the requirements. So the company got one other point for that particular part of the question. In black, you see the aspects where the company didn't meet the requirements and in orange partially. Another value here is also in the last part of the table, the actual assessment remark, where the analysts and my team explain what is it that you didn't meet -- that the company didn't meet the expectations, what is still missing to meet the requirements of the assessment. And now before I hand over to Warrick, I would like to give you a sneak peek view of one of the new services that we're launching, the Investor Relations Sustainability Insights report. And I would like to show this today because I think among the audience, there are many of you in Investor Relations or sustainability teams that could find this new surface of interest. And this service actually would empower you to see sustainability-based opportunities and mitigate risk in the capital market. So in brief, what is this service about? First of all, if we look at the left side of the slide, it's a breakdown of the surface, and it starts with us identifying the top ESG priorities of your main investors, whether your investors have find climate strategy more important, labor practices, good governance, any ESG topic based on market intelligence data from S&P Global, we have this type of insights, and we can define which are the top ESG topics that are of importance to your investors. Then what's required for this service is actual assessment to the CSA. So as already mentioned, if you're not in the invited universe, but you're interested in a CSA, we offer this as a service as well. And then part of the service is that based on the CSA results, we provide a detailed insight into your company's performance on those ESG topics that were determined by your top investors as being most important. And this kind of insights, first of all, of course, allows you to close those gaps to work on those areas for improvement. But secondly, it allows you to have a conversation with your investors on those ESG topics. And finally, there's an opportunity to attract sustainability-focused investors. So with this, I would like to close my part of the presentation. Thank you for your attention, and I'll hand over to Warrick.

Fantastic. Thank you very much, Annelies. So moving on to the part of the session today, where we're going to look at some insights. As we've been conducting this assessment over the last 2 decades and more, we've been collecting a lot of data. We have a lot of scores year-on-year. So we can really tell a lot of stories and do an analysis of specific markets, which we're going to do for Switzerland today into some of the more granular details. Bearing in mind the ESG scores, they're a representation of performance management of material ESG issues as well as disclosure and transparency. So we briefly introduced the CSA, the methodology, the process of participation. We looked at benchmarking and the different services we can use to further our sustainability strategies. And now we're going to look at this market analysis. So just to be clear, looking at the scope of this analysis, we're looking at 166 companies within Switzerland between years 2023 and 2024, noting that 66 of those companies actively participate in the assessment. And you can see in this pie chart, a broad breakdown of the industries of these companies, primarily being dominated by industrials, the health care and financial sectors. Bearing in mind that the questionnaires in the CSA are industry-specific. So the data that you're going to see will be also coming from mainly these sectors that dominate the industry that dominate the Swiss market. So the topics that we're going to cover today, first and foremost, materiality that being the start of any real reporting and sustainability journey because as Robert was mentioning in the beginning, we really want to focus on those drivers of business benefits, capital efficiencies, corporate value drivers. Overall, we can say enterprise value creation and the sustainability metrics and topics that are going to impact those. And as you will see in the links at the end, a lot of the research that we've been conducting, but also that is conducted externally, the social metrics, materiality, labor practice indicators, human capital development, these are the most common research articles we see internally as well as within the academic sphere that have direct links to enterprise value creation metrics. So please look out for those links later to read these very interesting articles, a lot of the data, which I'm going to show now. However, with this Swiss focus. So we're going to start off with materiality, as I said, really forming the foundation of understanding which issues are going to be the most impactful, both internally to the business as well as externally toward our communities, people and such. Within this criterion, it's made up of five questions within the CSA, and we really want to understand the company's materiality process, how they involve external stakeholders. Is it a double materiality assessment or just a financial materiality assessment? Is it third-party verified? These are the types of rationale and metrics that we incorporate into this criterion. Primarily as well, which we'll see later is that we also ask companies and we capture data for the top 3 material metrics for each year that they report. So as I said, the materiality criterion is made up of five questions that you can see on the left here. To give you an example, these are the actual scores that the companies, that universe of 166 companies are achieving on average. For the rest of the figures, Switzerland will always be in red, Europe will be in light blue, whereas all of the universe comparing to those global averages will be in dark blue. So we can see within the materiality analysis question that Switzerland is slightly outperforming the broader global universe of companies. However, they are on parity with the EU region in terms of score. Similar for material issues for enterprise value creation, we see that companies broadly across the whole universe are scoring roughly a 70 for this question, which is very good performance. However, lastly, on the bottom question, materiality metrics for external stakeholders. We see that not many companies are actually reporting on this question as it requires public information. So a few companies are actually reporting on specific KPIs that affect external stakeholders and that are tracking and monitoring these metrics. They have defined these metrics. So this really provides an overview of a broader disclosure in the market, but also a performance into the granularity of materiality. Moving over to two figures here, where, as I mentioned, we are capturing the three top material issues that a company reports for every company within the universe. So in terms of analysis, we can look at which topics out of the 21 that S&P Sustainable1 maps to, which are the most frequently reported if we aggregate all that information. So we see in 2023 on the left-hand figure that 9% of companies within Switzerland reported employee well-being, health and safety as the most material issue within their business based on their materiality assessment compared to 8% in the broader EU region reporting on that same material issue. Just below that, sustainable products and services coming in at 7% of Swiss companies reporting that as their top 3 material issue. As well as interesting, climate transition and physical risk ranked #3 in Switzerland. That's the most frequently reported material issue, followed by ethics compliance and corporate governance. If we move over to 2024, we can see that there has been a shift in the material topics that companies within Switzerland and the EU region are reporting. Climate transition and physical risks now are the most frequently reported top material issue at 13% within Switzerland, whereas corporate governance and ethics has now moved to second place as the most frequently material issue. Followed by occupational health and safety, and we can see sustainable products and services has moved from #2 in 2023 to #5 in 2024. So we do see a shift in the material issues that companies are prioritizing and defining year-on-year. So let's have a look at a greater detail in how companies are actually conducting materiality assessment. Firstly, on the left-hand side of the figure, we can see that out of the 166 companies, 90% of those in Switzerland are reporting on their analysis. So reporting on their process, how they are conducting their materiality assessment, which is very good numbers. They're outperforming the EU, which only 80% of the companies disclose on this process. For the companies that do report, we see that 20% -- 27% in Switzerland conduct this assessment annually, whereas 30% conduct the materiality assessment once every 2 or more years. Very interesting as well, how many conduct a double materiality assessment compared to a singular financial materiality assessment. We can see in Switzerland, 62% of the companies follow a double materiality approach whereas only 49% in the broader EU region follow a double materiality approach. So moving on to labor practices and human capital. These are the focuses of today's session. Notably, the CSA is a full spectrum approach to sustainability covering the E, G and S dimensions. But as we wanted to really dive into metrics that relate to enterprise value creation, we looked at these three today. So for labor practices and human capital management, you can imagine that we are collecting data and asking questions on living wage methodologies, public disclosures of anti-harassment policies, the development programs and the education programs that companies make available to their employees. We're also measuring things like employee turnover rates, voluntary and involuntary. We're looking at workforce breakdowns. We're looking at gender pay gap analysis, these kind of metrics that determine the impact to the employees and well-being of the company. If we look at those criterion scores, so remembering that criterions are made up of several question scores for labor practice, we see that from 2021 to 2024, there's been a constant increase in terms of the criterion score overall, Switzerland generally outperforming the global averages, whereas on parity or just below that of the EU region. The yellow bar on this chart shows the companies that are included in the Dow Jones Best-in-Class Index. So these are the set of indices that we create using the best performers of the scores. So you can see that they are scoring very high on average within this criterion. In terms of human capital management, we see that there's quite a -- there's no real increase in score trend. However, we do see that there's quite a parity across the EU and Switzerland with the global averages performing slightly below that. So again, better overall scores than the labor practices criterion, however, not much fluctuation in scoring. To dive in on the labor practices criterion, these are some of the agnostic questions that are asked to all industries. We can see discrimination and harassment, gender pay indicators, different workforce breakdown scores. And for discrimination and harassment and freedom of association, we can see that Switzerland is well outperforming the global averages and achieving around parity compared to the EU region in terms of those question scores. We see that in gender pay indicators, globally scores are very low. So we can see that companies are not really reporting on these key metrics because our CSA requires most of this data to be reported publicly in order for companies to achieve score. To start diving in on the actual metrics that we collect, we've looked at two important indicators here. Firstly, on the left, we see that 95% of companies within Switzerland report their share of women in the total workforce. Compared to 92% within the EU region reporting these exact numerical values. And in Switzerland, 35% on average is the women in the workforce percentage, whereas in the EU, essentially parity around 37% of women making up the total workforce. More into granular detail on the figure on the right, this is how many companies publicly report on a gender gap analysis. So the actual salaries and compensation of men versus women within their workforce. And we see that within Switzerland, but also in total in the overall EU region, and only around 10% are actually reporting the numerical values publicly for this question. So most companies around 89% are not reporting on these actual figures yet. As Robert mentioned in the beginning, we also allow for companies during participation to share some data with us that they are not yet reporting in the public sphere. So we see based on participants that only 5% and 6% within Switzerland and the EU are reporting this data to us in a private capacity. So there's a very large gap in companies actually covering and reporting on a gender pay gap analysis. So we hope to see advancements in that in the future. Lastly, because we all believe that Switzerland is a great place to work, I wanted to look at some numbers in terms of how employees enjoy the benefits of working here. We see that very high percentages in Switzerland on the left and in the EU disclose the employee support programs and development programs that companies have. This means that these companies actually have these programs in place. Therefore, we've captured this metric. So a very good value across the board there for companies supporting their employees. We see that in terms of flexible working hours, 62% of companies in Switzerland allow this, whereas 56% of companies in the broader EU region allow this. Working from home arrangements, very good values as well. 70% of companies in Europe and Switzerland report that they have working from home arrangements. Lastly, and as we can expect with the 80%, 60%, far higher, far more companies within Switzerland allow part-time working conditions and options compared to 34% in the total EU region. So that essentially concludes some of the case studies today. We're going to move over. I see we have 9 minutes for questions, which is great. I'm going to start tallying those up now. And this is the slide that you will see. If you're watching this as a replay, all of the links to the different various websites that we have and to the research articles that we have available on screen.

So looking at the question screen here, I'm going to direct our first question to Robert. And the question is, it's very convenient that previous year's answers can be reused. However, for static content, do we need to update references from 2023 to 2024 publications? Or is it sufficient to use the previous ones?

We don't expect a policy, for example, to change every year. So what is necessary is that you reattach it as a sign for us that this is still valid and still in use in your company. When it comes to quoting, for example, I don't know, employee development programs, these can be from last year's document, but not older than 1 year. So you can carry them forward. Otherwise, you would have to have them again in your most recent reporting or quote another program that you have in a more recent reporting. But the idea is you don't have to reinvent the wheel. If something is still valid, you can quote it again as still valid.

Great. Thank you, Robert. So we have another question here. Curious, is there a recommended minimum company size or revenue to take part in the CSA? It seems like it might be more relevant for larger companies. Annelies, could you help us answer this?

Yes. Thank you. Very good question. Indeed, the CSA is mostly relevant for larger companies. Having said that, there are many companies, medium-sized companies that also participate in the CSA. There are several with a market cap around 50 million that find the CSA, it's process and working with the assessment results very valuable. And as I already mentioned, for companies not invited, there are also other opportunities to participate in the CSA. For example, we offer a fundamental version, which has a reduced scope and for -- is more relevant for companies that are smaller and medium-sized and aren't part of that invited universe.

Fantastic. I definitely be in touch if you're interested in conducting the assessment yourselves using the CSA as a service. So on to our next question, which I believe is in two parts. The first part is saying, can we opt for S&P to do the review based on public information? And if you do this anyway or do you only assess companies that say they want to participate. In other words, if the company chooses not to participate, will we still assess them? So Robert, could you help us answer this, please?

Sure. Yes. Every year, we established what we call the invited universe. This is largely based on the need of our colleagues at S&P Dow Jones Indices to have a certain coverage of ESG scores for companies that are members of the indices that have ESG versions like the S&P Global 1200 ESG, the Euro 350 ESG, the S&P 500 formerly ESG now scored and screened all of them or the Dow Jones Best-in-Class Indices formerly DJSI. There's another question on that, that I can also answer next, Warrick. But this invited universe has to be assessed. So we will provide a score if your company received an invitation. If you can find it in the invited companies lookup on the CSA website, you will be assessed in any case, independent of whether your company decides to participate or not. And there will be a score made available to the investment community plus use for indices selection. To maybe answer immediately the question on DJSI, there was a renaming. DJSI was one of the first indices using results from the CSA, it stands for Dow Jones Sustainability Indices was established 25 years ago. There was a name change of this and other indices following ESMA regulation that put a requirement, especially on financial service providers that want to produce financial products using these indices as a benchmark with a very narrow definition of what is allowed to be called sustainable. And as these indices, as the name now says are best-in-class, we look at all 62 industries that is including tobacco or fossil fuels. And therefore, in order to allow S&P Global clients to still use the index as a benchmark, we changed the name to something more factual, calling them the Dow Jones best-in-class indices. And of course, already in the past, all of these would have versions called ex tobacco, ex fossil. It's very easy to do that. But now it's also very neutral in the name.

Great. And I'm going to keep you on the line there as well, Robert. We have a question asking, does participating in the CSA come for free for the first year and the years after. Robert? So I can help answer that. The CSA universe that we select at the beginning of each year, if you are part of that original universe, you will receive the invite to participate and you will do so for free. And you will be able to participate each subsequent year also for free. It is only that the first time you participate, we offer to do the public assessment based on your data beforehand, such that it helps you along in the process for the first time you participate. Likewise, there's another question in the chat asking about how do we get on to the platform, how do we start participating? Robert's team leads up our corporate engagement team, which essentially you can e-mail them on csa@s&pglobal.com, and they will assist you with anything. as well as we have an established help line for questions throughout the participation of this call. So with that, any further questions we will answer by mail. I want to thank you very much, and thank SIX for hosting us and allowing us to present everything today and wishing you all a very wonderful day and week further.

Warrick?

Yes.

Yes, sorry. I was dropping out. I had Internet connection problems, and I just heard you say something that I want to clarify on. If your company participated in the past and you are interested in the redo and add option, reach out to us at [email protected].

Fantastic. Thank you, Robert. Enjoy the week further, everyone. Thank you, SIX. Thank you, everyone. Have a good day.

Thank you. Goodbye.