The state as an owner and SOEs can lead by example by integrating sustainability commitments into their policies and practices. This is important as SOEs often operate in sectors systemically significant to the low carbon transition, such as energy, transport, and infrastructure. This chapter explores practical methods through which SOEs can advance sustainability, from two angles: through the role of the state as an owner, and through the role of SOE boards. It also examines trends in sustainability-related disclosures, including of greenhouse gas emissions.
Ownership and Governance of State-Owned Enterprises 2024
Abstract
SOEs often operate in sectors that are vulnerable to sustainability-related risks, particularly those with high greenhouse gas emissions, but they also have significant opportunities to play a crucial role in driving climate action and ensuring a just transition. Governments as owners of enterprises and SOEs themselves should lead by example and manage risks and opportunities in a way that contributes to sustainability, resilience, and long-term value creation. This chapter finds that:
Half of the largest 126 SOEs by revenue in the Fortune Global 500 list operate in hydrocarbons, utilities, engineering and construction, energy, and metals. They also account for 59% of the revenue of all 126 SOEs and employ over 9 million people.
The public sector is an important shareholder in the 100 highest emitting listed companies, holding 18% of the shares globally.
Only 26% of jurisdictions explicitly include climate goals in their SOE ownership policy. Another 29% have climate-related policies, expectations, or mandates for specific SOEs.
SOE boards have the responsibility of implementing the state’s sustainability expectations and policies at the enterprise level through objectives, targets, disclosure, and monitoring mechanisms. Reporting and disclosure on sustainability should follow high quality internationally recognised standards facilitating consistency and comparability. While sustainability disclosure frameworks are often encouraged, their implementation tends to be voluntary in nature, and not all SOEs implement them.
In a sample of 479 listed SOEs, 92% disclosed sustainability-related information in 2022. This represents 98% of the market capitalisation of all SOEs in the sample. Most jurisdictions surveyed either mandate or strongly encourage climate-related non-financial reporting if it is deemed material to the SOE.
Of the same sample of 479 listed SOEs, 51% disclosed scope 1 and scope 2 emissions, and 23% disclosed scope 3 emissions. In terms of market capitalisation this represents 72% for scope 1 and 2, and 27% for scope 3. This shows a commitment to transparency in this area but also significant room for improvement.
The 2024 edition of the SOE Guidelines introduces a new chapter addressing sustainability (Chapter VII). The chapter notes that the corporate governance framework should provide incentives for state ownership entities and SOEs to make decisions and manage their risks in a way that contributes to SOEs’ sustainability and resilience and ensures long-term value creation. Where the state has sustainability goals, the state as an owner should set concrete and ambitious, sustainability-related expectations for SOEs, including on disclosure and transparency, the role of the board, responsible business conduct and stakeholder engagement (OECD, 2024[1]). This chapter explores these elements in more detail.
5.2.1. The role of the state
States and in particular governments have a leading responsibility in achieving sustainability goals. They can fulfil this responsibility by setting a long-term vision and frameworks to achieve them through national sustainability strategies and targets. They can leverage regulatory authority by enacting laws and regulations in fields such as climate and the environment, human rights, and social justice. They can provide and drive investment and innovation for sustainable development. And they can foster a conducive environment for sustainability through policies and spawn change and lead by example as economic actors, including through their role as an owner.
Where the state has set sustainability goals, the SOE Guidelines call on it to integrate these goals in ownership policy and practices by 1) setting concrete and ambitious sustainability expectations for SOEs, while respecting other shareholders; 2) communicating and clarifying shareholder expectations on sustainability through regular dialogue with the boards; and 3) assessing, monitoring and reporting on sustainability objectives and performance of SOEs on a regular basis (OECD, 2024[1]).
In addressing climate change, states shoulder responsibility in terms of setting ambitious climate targets, implementing pertinent policies such as carbon pricing mechanisms and regulations, facilitating international co-operation through international agreements and actions, building climate resilient infrastructure, and driving behavioural change, including through their SOEs.
All jurisdictions covered in this report have established sustainability commitments, for example through their endorsement of the Sustainable Development Goals (SDGs) and the Paris Agreement. Aligning SOE policies and practices in a coherent manner with those commitments is essential to their achievement given that SOEs operate in various carbon-intensive sectors such as energy, hydrocarbons, and transport.
Note: Fiscal years ending before March 2023.
Source: Fortune, Global 500, consulted in January 2024
Note: Fiscal years ending before March 2023.
Source: Fortune, Global 500, consulted in January 2024.
Table 5.1 and Figure 5.1 show that 63 SOEs (out of 126) from the Fortune Global 500 list operate in high greenhouse gas (GHG) intensity sectors. Those SOEs account for 59% of the total revenue of all SOEs in that list and employ 9 352 000 people. Furthermore, the public sector is an important shareholder in the 100 highest emitting listed companies, holding 18% of the shares globally, and significantly higher shares in the People's Republic of China (hereafter 'China') (64%) and Latin America (50%) (OECD, 2024[2])(Figure 5.2).
SOEs can play an important role in the shift to low carbon and carbon neutral activities, for example through clean energy and carbon capture and storage. Globally, 60% of generation capacities in renewables, hydropower and nuclear power are state-owned, while nearly all carbon capture and storage projects have received public support, with one-third of capacities operating as SOEs, according to the International Energy Agency (OECD, 2022[3]).
SOEs can lead by adopting clean technologies and sustainable practices within their operations, and channelling investments towards renewable energy infrastructure and sustainable development projects. They can also adopt procurement policies that prioritise sustainable suppliers and products, while transparent reporting and accountability mechanisms can ensure that SOEs operate ethically and contribute to broader sustainability goals.
SOEs may incorporate social and environmental goals, alongside financial performance, which require long-term vision and systemic transformations. There is a growing trend to translate climate and environmental policies into state ownership policies. In some cases, these also complement rationales for state ownership, particularly about addressing market failures or fulfilling activities of public interest which relate to broader policy goals on mitigating climate change (OECD, 2022[3]).
A few jurisdictions explicitly incorporate climate goals and policies into SOE policies, expectations, and mandates. In addition, all jurisdictions for which there is information apply climate laws and regulations uniformly to SOEs and non-SOEs (apart from other sector specific environmental laws and regulations). Table 5.2 shows that 39% (12 out of 31) of jurisdictions surveyed have climate policies that are explicitly applicable to SOEs, and only 26% (8 jurisdictions) explicitly include climate dimensions into their SOE ownership policy. Another 29% (9 jurisdictions) have climate-related policies, expectations, or mandates for individual SOEs.
Note: Asia (excl. CN & JP) = Asia, excluding China and Japan. “Other free-float” refers to the holdings by shareholders that do not reach the threshold for mandatory disclosure of their ownership records.
Source: OECD (2024), Global Corporate Sustainability Report 2024, OECD Publishing, Paris, https://doi.org/10.1787/8416b635-en.
States can therefore advance sustainability and climate goals by adopting ownership policies that address the risks and opportunities associated with SOEs and the sectors in which they operate, and SOEs can lead by example through responsible business conduct. Ownership policies should also be aligned with broader national objectives on sustainable development, including international commitments (OECD, 2024[1]). Box 5.1 includes examples of how countries link climate goals with state ownership policies.
Source: OECD (2022[3]), Climate change and low-carbon transition policies in state-owned enterprises, OECD Publishing, Paris, https://doi.org/10.1787/e3f7346c-en.
The 2022 OECD report Climate change and low-carbon transition policies in state-owned enterprises identifies a few examples of how states link their climate goals and ownership policies:
Finland’s state ownership policy includes corporate social responsibility (CSR) expectations for SOEs. They are also required to consider the objective of achieving a carbon-neutral Finland by 2035 and contribute to limiting increases in global temperatures based on the Paris Agreement.
Germany’s Principles of Good Corporate Governance and Active Management of Federal Holdings set out measures to ensure sustainable governance of the federal SOEs, while considering the German Sustainable Development Strategy and Sustainable Development Goals. In addition, the German Federal Climate Change Act requires the state to ensure that SOEs (including fully and partially owned) pursue a climate-neutral organisation of their administrative activities.
The ownership policies of Norway and Sweden reflect requirements to promote sustainable business practices in SOEs, including the achievement of climate-related objectives and compliance with international standards (including the OECD MNE Guidelines).
In France, specific climate-related expectations for SOEs are identified in the APE’s (the ownership entity) CSR charter, which refers to meeting goals under the Paris Agreement and the national climate action plan.
Source: OECD (2022[3]), Climate change and low-carbon transition policies in state-owned enterprises, OECD Publishing, Paris, https://doi.org/10.1787/e3f7346c-en.
5.2.2. The role of the board
The SOE Guidelines posit that while the state is responsible for setting expectations and ensuring a legal and regulatory framework conducive for SOEs to attain the government’s sustainability objectives, it should remain the responsibility of the boards of directors to develop SOEs’ objectives and implementation frameworks. This requires state ownership entities to act on high-level expectations by actively engaging with individual SOE boards and other shareholders where applicable. The state should expect SOE boards to adequately consider sustainability risks and opportunities, in particular by: 1) reviewing and guiding the development, implementation and disclosure of material sustainability-related objectives and targets; 2) integrating sustainability considerations into risk management and internal control systems; and 3) integrating sustainability matters when assessing and monitoring management performance (OECD, 2024[1]).
States can communicate policies and expectations to boards through a number of mechanisms. Regular discussions on sustainability can clarify expectations and promote the integration of sustainability goals in corporate strategies. Finland, France, Norway and Sweden, for example, encourage SOE boards to engage in shareholder dialogue. In these countries, meetings to discuss sustainability-related expectations tend to occur on a quarterly basis. Depending on the role the SOE can play in the climate transition, such meetings may be held more frequently to ensure the tracking of sustainability targets.
Capacity-building activities and training opportunities can encourage SOE boards to consider sustainability matters holistically and develop a full set of skills to deal with the challenges and opportunities that climate mitigation and adaptation present. For example, in Sweden, there have been initiatives to increase awareness of the 2030 Agenda and the Sustainable Development Goals, including through a series of workshops for Swedish executives. Workshop topics include materiality analysis, impact analysis of operations, and sustainability reporting guidance.
Some jurisdictions task SOE boards with the creation of sustainability committees or select a member of the board to advise on sustainability-related matters during boardroom discussions. In France, the government holding agency APE requires the executive committee of its portfolio companies to appoint a member tasked with the promotion of the national climate policy, which aims to reduce emissions in line with the Paris Agreement.
The SOE Guidelines note that the state should expect SOEs to be subject to appropriate sustainability reporting and disclosure requirements, based on consistent, comparable, and reliable information. Information and metrics of increasing importance deal with sustainability-related governance, strategy, risk management and non-financial performance (e.g. greenhouse gas emissions, collective bargaining coverage). This information and these metrics are important for strengthening the accountability of SOE boards and management on sustainability matters and in enabling the state to act as an informed owner based on a clearer picture of SOEs’ performance (OECD, 2024[1]).
The SOE Guidelines add that sustainability reporting and disclosure should be aligned with high-quality internationally recognised standards that facilitate the consistency and comparability of sustainability-related disclosure across markets, jurisdictions, and companies. SOEs’ reporting and disclosure of sustainability-related information can support the state in tracking its progress towards sustainability and climate commitments (OECD, 2024[1]).
A growing number of listed SOEs are disclosing sustainability-related metrics. Providing comparable, material information on an enterprise’s exposure to sustainability risks and opportunities reduces information asymmetries in equity and debt markets. It also allows investors to fulfil their shareholder rights and debtholders to make informed decisions, facilitating market efficiency.
Listed SOEs can play an important role in sustainability disclosure. In a sample of 479 listed SOEs, 441 disclosed sustainability-related information in 2022, representing 98% of the market capitalisation of all SOEs in the sample (Figure 5.3) (OECD, 2024[2]).
Note: Asia (excl. CN & JP) = Asia, excluding China and Japan.
Source: OECD Corporate Sustainability dataset, Bloomberg.
While the disclosure of sustainability-related information is often conducted on a voluntary basis, some jurisdictions have started enforcing mandatory corporate sustainability reporting. In the EU, for example, large and listed companies are subject to reporting according to the European Sustainability Reporting Standards under the Corporate Sustainability Reporting Directive (CSRD). The UK Sustainability Disclosure Standards (SDS) are a national framework for sustainability disclosure, though the regulatory framework is still being developed so enforcement is limited.
Notes:
1. IFRS Foundation announced in November 2021 the formation of the International Sustainability Standards Board (ISSB), which will sit alongside the International Accounting Standards Board (IASB), to set IFRS Sustainability Disclosure Standards. IFRS Foundation’s recently amended constitution provides that IFRS Sustainability Disclosure Standards “are intended to result in the provision of high-quality, transparent and comparable information […] in sustainability disclosures that is useful to investors and other participants in the world’s capital markets in making economic decisions” (item 2.a). SASB Standards Board and Integrated Reporting Framework Board (<IR> Framework Board) merged in June 2021. Currently, both standard-setting boards are supervised by a newly created organisation called Value Reporting Foundation Board (VRF). In November 2021, the VRF committed to consolidate into the recently created ISSB by June 2022.
2. GHG Protocol’s corporate accounting and reporting standard provides requirements and guidance for companies preparing a corporate-level GHG emissions inventory. It does not adopt a materiality concept, and other ESG reporting frameworks and standards will typically either require or allow GHG emissions to be disclosed according to GHG Protocol’s standard. In this standard, GHG emissions are classified under three categories: Scope 1 (direct emissions from a company’s own operations); Scope 2 (emissions from purchased or acquired electricity, steam, heat and cooling); Scope 3 (the entire chain emissions impact from the goods the company purchases to the products it sells).
3. CDP’s questionnaires would not be considered a reporting framework or standard in the traditional sense, but the institution offers a widely used system for companies to answer to any of the following questionnaires: Climate Change; Forests; Water Security. The questionnaires are meant to be disclosed to (i) investors or to (ii) customers interested in assessing the environmental impact of their supply chain. Corporate management is not supposed to make a materiality assessment of the information to disclose, because CDP offers a set of questions by economic sector and companies have strong incentives to answer all of them in order to receive better scorings calculated by CDP’s system. Questionnaires are shortened only for companies with an annual revenue of less than EUR/USD 250 million and corporates answering the questionnaire for the first time. CDP provides the Secretariat for CDSB. In November 2021, the CDSB committed to consolidate into the recently created ISSB by June 2022.
4. According to the CDSB Framework, environmental information should be disclosed if financially material or relevant. “Relevant” in this context would be information that might be financially material at some point, while the link between the information and future cash flows is not evident. In either case, GHG emissions shall be reported in all cases regardless of management’s assessment of their materiality or relevance (CDSB, 2019).
Source: OECD (2022[4]), Climate Change and Corporate Governance, Corporate Governance, OECD Publishing, Paris, https://doi.org/10.1787/272d85c3-en. and OECD (2022[3]), “Climate change and low-carbon transition policies in state-owned enterprises”, OECD Business and Finance Policy Papers, No. 05, OECD Publishing, Paris, https://doi.org/10.1787/e3f7346c-en.
Besides national sustainability and disclosure standards, there is also a range of international frameworks designed by private or public sector entities. A number of them have served as a benchmark to design national frameworks and are implemented by enterprises on a voluntary basis. However, consistency between these international frameworks is a challenge and calls for improved co-ordination. A notable example is the International Sustainability Standards Board (ISSB) under the IFRS Foundation, which is tasked with creating the global baseline for sustainability disclosure, aligning IFRS Integrated Reporting Framework and Sustainability Accounting Standards Board (SASB) standards (Table 5.3).
In 2023, listed companies primarily adopted the Global Reporting Standards and the TCFD as the preferred framework for sustainability-related disclosures (Figure 5.4). This trend applies across all regions and remains consistent when disclosure is measured by number of companies, as well as by market capitalisation. Globally, larger listed companies appear to primarily implement the Global Reporting Initiative (GRI) standards or the TCFD, while smaller firms tend to implement the SASB standards or other frameworks.
Note: Asia (excl. CN & JP) = Asia, excluding China and Japan. LAC = Latin America and the Caribbean.
Source: OECD Corporate Sustainability dataset, LSEG, Bloomberg.
5.3.1. Non-financial sustainability disclosure practices of SOEs
According to the SOE Guidelines, state owners should expect SOEs to adhere to suitable sustainability reporting and disclosure standards founded on consistent, comparable, and reliable information (OECD, 2024[1]). The disclosure of sustainability-related information typically encompasses governance, strategy, risk management, and other non-financial aspects, such as sustainability metrics like greenhouse gas (GHG) emissions.
Most jurisdictions surveyed either mandate or strongly encourage climate-related non-financial reporting if it is deemed material to the SOE. Often, such requirements are part of a broader framework rather than specific laws or regulations tailored for SOEs. When preparing non-financial reports, enterprises might refer to national, EU, international, or other non-binding guidelines for reporting on non-financial information. There is a small number of jurisdictions that have more rigorous expectations set for SOEs. In Sweden, for example, expectations regarding climate disclosure are more stringent for SOEs (Box 5.2).
Companies in Sweden with over 250 employees are required to submit non-financial reports including climate and sustainability information. This obligation applies to all SOEs regardless of size. In Sweden, majority state-owned enterprises are also expected to produce a separate sustainability report which complements existing disclosure requirements that SOEs are exposed to.
Sweden’s ownership policy references sustainability guidelines
Sweden’s state ownership policy includes expectations regarding sustainable business practices for SOEs. It assesses the following principles and guidelines as material to the operation of SOEs:
The Ten Principles of the UN Global Compact.
The UN Guiding Principles on Business and Human Rights.
The OECD Guidelines for Multinational Enterprises on Responsible Business Conduct.
Section 5.1 on sustainable business encourages, among others:
A sound and healthy work environment, respect for human rights, including the rights of children, and good and decent working conditions. Enterprises also have to take account of diversity aspects and foster an inclusive culture.
Environmentally sustainable development with less impact on the climate and environment.
Identification, assessment, management and transparent reporting of climate-related financial risks and opportunities in operations.
Source: Sweden’s State Ownership Policy and principles for state-owned enterprises (2020[5]), https://www.government.se/contentassets/aef85fbd7beb4319a70af9a30d6723a1/state-ownership-policy-2020.pdf.
Among the jurisdictions surveyed, the majority recommends or requires the disclosure of climate-related information as part of an aggregate report covering a portfolio of SOEs (Table 5.4). A small sub-section of jurisdictions requires the disclosure both in SOE-specific reports and aggregate reports.
Source: OECD (2022[3]), Climate change and low-carbon transition policies in state-owned enterprises, https://doi.org/10.1787/e3f7346c-en.
5.3.2. Greenhouse gas emission disclosure by listed SOEs
The SOE Guidelines suggest that sound reporting and disclosure standards for SOEs on sustainability includes information on sustainability-related metrics, such as greenhouse gas emissions. The disclosure of greenhouse gas emissions is of increasing relevance and importance for shareholders, investors and stakeholders, including the general public. Box 5.3 explains the most widely implemented greenhouse gas emission standard, the GHG Protocol, and its emission scopes.
Although SOEs commonly disclose sustainability-related information, they often underperform in reporting GHG emissions. Among the 479 listed SOEs in the sample mentioned before, only 23% disclose scope 3 GHG emissions, representing 27% of total market capitalisation. By contrast, nearly 70% of the market capitalisation of all listed companies discloses scope 3 emissions (Figure 5.5).
What is the GHG Protocol?
The GHG Protocol establishes a comprehensive and standardised framework to measure and manage greenhouse gas emissions from private and public sector operations, value chains and mitigation actions. It further provides tools and online training that supports jurisdictions, private sector and non-governmental organisations to track progress towards climate ambitions.
Scope 1 – direct emissions
Scope 1 emissions cover direct emissions from sources owned or controlled by a company, such as on-site energy use, including natural gas and fuel, as well as emissions from combustion in owned boilers, furnaces, and fleet vehicles. This also includes process emissions from industrial activities and on-site manufacturing.
Scope 2 – indirect emissions
Scope 2 emissions account for a significant portion of global greenhouse gas emissions, offering a key opportunity for reduction efforts. These emissions include those generated from purchased energy, such as electricity, steam, heat, or cooling, produced off-site and used by the reporting company. For instance, electricity bought from a utility company falls into this category. On the other hand, if a company generates its energy on-site or if energy suppliers have their own generation facilities, emissions from this process are classified as direct scope 1 emissions.
Scope 3 – indirect value chain emissions
Scope 3 emissions encompass all emissions occurring throughout a reporting company's value chain. These emissions stem from activities impacting assets not owned or controlled by the reporting organisation. Despite being beyond the company's direct control, they often constitute a significant portion of its greenhouse gas inventory. GHG Protocol further divides scope 3 emissions, based on financial transactions, into upstream and downstream emissions across 15 categories.
Source: GHG Protocol (2024[6]) https://ghgprotocol.org/standards.
A similar pattern is observed for scope 1 and 2 greenhouse gas emissions, yet to a lesser extent. By number, half of listed SOEs in the sample disclose scope 1 and 2 greenhouse gas emissions (i.e. emissions that stem directly from operations or purchases of polluting commodities and materials). They represent 72% of market capitalisation in the sample of SOEs. When considering all listed enterprises, those that disclose scope 1 and 2 emissions account for nearly 80% of market capitalisation.
Regarding GHG emission reduction targets, some interesting patterns emerge from Figure 5.6 when comparing listed SOEs to listed companies in general. Globally, more SOEs disclose GHG targets than listed companies overall. However, when measured by market capitalisation, the share is higher for listed companies. This suggests that smaller SOEs (in terms of market capitalisation) are more likely to disclose GHG targets, a trend that is even more pronounced in certain regions, such as Japan and Europe.
Note: Asia (excl. CN & JP) = Asia, excluding China and Japan.
Source: Panel A - OECD Corporate Sustainability dataset, LSEG, Bloomberg. Panel B - OECD (2024[2]), Global Corporate Sustainability Report 2024, https://doi.org/10.1787/8416b635-en .
Note: Asia (excl. CN & JP) = Asia, excluding China and Japan.
Source: Panel A - OECD Corporate Sustainability dataset, Bloomberg. Panel B - OECD (2024[2]), Global Corporate Sustainability Report 2024, https://doi.org/10.1787/8416b635-en.
The SOE Guidelines posit that the state as an owner should set high expectations for SOEs’ observance of responsible business conduct (RBC) standards together with effective mechanisms for their implementation, and should fully recognise SOEs’ responsibilities towards stakeholders. Such expectations should be publicly disclosed in a clear and transparent manner (OECD, 2024[1]).
In line with this, SOEs should observe RBC standards across business operations and along the entire supply chain, including with regard to human rights, employment and industrial relations, the environment, anti-corruption, consumer interests, science, technology and innovation, competition and taxation. The OECD Guidelines for Multinational Enterprises on Responsible Business Conduct (MNE Guidelines) provide a set of recommendations by governments with the aim to encourage positive contributions from enterprises to economic, environmental and social progress, and to minimise adverse impacts that may be associated with a company’s operations, products and services (OECD, 2023c). Other international instruments in this area include the ILO Declaration on Fundamental Principles and Rights at Work; the ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy; and the UN Guiding Principles on Business and Human Rights.
To mitigate the risk of corruption in the state-owned sector and limit its impact on other sustainability-related risks (e.g. human rights risks, environmental risks), state owners and SOEs should implement the OECD Guidelines on Anti-Corruption and Integrity in State-Owned Enterprises (ACI Guidelines). These ACI Guidelines focus on actions that state ownership entities can take to maximise the likelihood that SOEs and their staff act with integrity and insulate themselves and their business from undue influence. The ACI Guidelines’ recommendation V on accountability promotes the state’s and SOEs’ engagement with stakeholders to promote integrity.
When implementing RBC instruments such as the MNE Guidelines, SOEs, like other companies, should utilise tools such as risk-based due diligence, which is a practical process to: 1) Embed RBC into a company’s policies and management systems; 2) Identify and assess actual and potential adverse impacts associated with the enterprise’s operations, products and services; 3) Cease, prevent and mitigate adverse impacts; 4) Track the implementation and results; 5) Communicate how impacts are addressed; 6) Provide for or co-operate in remediation when appropriate (OECD, 2018[7]). The OECD has developed a series of sectoral guidance for due diligence on RBC, which covers specific considerations for sectors where SOEs have an important presence – notably extractive industries, minerals, agriculture and the financial sector (guidelines for institutional investors).
All Adherents to the MNE Guidelines – all OECD member countries and 14 other economies - establish a national agency known as the National Contact Point for Responsible Business Conduct (NCPs), which promotes the adoption of RBC practices and due diligence, and handle cases (referred to as “specific instances”) as a non-judicial grievance mechanism related to the non-observance of the MNE Guidelines.
Stakeholder interests and engagement is another important element in the new sustainability chapter of the SOE Guidelines. In this regard, the SOE Guidelines establish that state ownership entities and SOEs should acknowledge the importance of stakeholder relations for building sustainable, financially sound, and responsible enterprises. It is therefore important that the ownership entity and SOEs recognise the impact that an active stakeholder policy may have on the enterprise’s sustainability and resilience as well as in the attainment of its long-term strategic goals and reputation. Furthermore, the legal framework should be transparent and enable stakeholders to communicate and obtain redress for the violation of their rights at a reasonable cost and without excessive delay. In addition, whistleblowers, individuals or organisations that report legal misconduct (e.g. regarding social or environmental regulations, corruption, human rights) of either the state or SOEs should be protected by law (OECD, 2024[1]).
Figure 5.7 provides an overview of disclosure policies on shareholder engagement for a selected number of listed firms, including SOEs. It shows that this is a common practice, with 81% of companies by market capitalisation performing such disclosure, with particularly high levels in the United States, Europe and other advanced markets, and lower levels in Latin America.
Note: Asia (excl. CN & JP) = Asia, excluding China and Japan.
Source: OECD Corporate Sustainability dataset, LSEG, Bloomberg.
References
[6] Greenhouse Gas Protocol (2024), Standards, https://ghgprotocol.org/standards.
[5] Ministry of Enterprise and Innovation (2020), State Ownership Policy and principles for state-owned enterprises 2020, https://www.government.se/contentassets/aef85fbd7beb4319a70af9a30d6723a1/state-ownership-policy-2020.pdf.
[2] OECD (2024), Global Corporate Sustainability Report 2024, OECD Publishing, Paris, https://doi.org/10.1787/8416b635-en.
[1] OECD (2024), OECD Guidelines on Corporate Governance of State-owned Enterprises 2024, OECD Publishing, Paris, https://doi.org/10.1787/18a24f43-en.
[9] OECD (2023), OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, OECD Publishing, Paris, https://doi.org/10.1787/81f92357-en.
[8] OECD (2023), Recommendation of the Council on the Role of Government in Promoting Responsible Business Conduct, https://legalinstruments.oecd.org/en/instruments/OECD-LEGAL-0486.
[4] OECD (2022), Climate Change and Corporate Governance, Corporate Governance, OECD Publishing, Paris, https://doi.org/10.1787/272d85c3-en.
[3] OECD (2022), “Climate change and low-carbon transition policies in state-owned enterprises”, OECD Business and Finance Policy Papers, No. 05, OECD Publishing, Paris, https://doi.org/10.1787/e3f7346c-en.
[7] OECD (2018), OECD Due Diligence Guidance for Responsible Business Conduct, OECD Publishing, Paris, https://doi.org/10.1787/15f5f4b3-en.