A text analysis on data from 212 companies across 17 sectors over 11 years

Analysing Prime Standard Annual Reports using Text Analysis and Natural Language Processing

An analysis and article by Anna-Sophia Schepp, Veronika Buchner, Alexander Lanz and Christopher Helm. The Python code of the analysis is available under MIT license.

The Federal Republic’s climate protection law has been tightened - Germany is to become climate neutral sooner. But will climate protection remain relevant in Germany despite the pandemic?

The goal of climate neutrality has been brought forward by five years to 2045 - Germany is to become greenhouse gas neutral by then. This means that there must be a balance between greenhouse gas emissions and their reduction. The path to this goal is set out with binding targets for 2030 and 2040. As early as 2030, 65 % fewer greenhouse gases are to be produced than in 1990.1 On the way to climate neutrality, however, there are always phases with issues that demand a high level of attention from people and companies and possibly jeopardize the achievement of the goal.

The Tagesschau reports a record drop in CO2 emissions.2 As a result of the global slump in economic activity, exit and contact restrictions, and reduced air and travel traffic, CO2 pollutant emissions have fallen. It appears that the pandemic is seemingly making it easier to achieve the goal of climate neutrality.

Will climate action remain relevant in the Covid-19 pandemic?

During the economic crisis in 2008, it became apparent that environmental and climate concerns were displaced by new threats that the economic crisis created. Researchers point to a displacement of climate change concern as an impact of the economic recession. This observation has been described as a “finite pool of worry.”3 The “finite pool of worry” stands as a metaphor for a limited emotional capacity to worry.4 Thus, worry about a new problem can reduce worry about other problems. One might expect health and economic worries associated with the pandemic to reduce worry about climate change.

“65 percent of Germans consider environmental and climate protection to be a very important issue - despite Corona.”, can be read on the website of the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety.

During the pandemic, further studies through social media and news analysis in China, Italy, and the U.S. surprisingly show an increase in concern about climate change, and across all age groups.5 Another survey of U.K. residents supports this perception, reporting no evidence of decreasing concern about climate change during the Corona pandemic. In fact, climate change is perceived by respondents as a greater threat than the pandemic.6

In addition to the perspective of individuals, the perspective of companies is particularly exciting, as they make a significant contribution to climate neutrality. Companies in particular are affected by the pandemic in an unprecedented way.

Forbes magazine goes a step further with the article “Rethinking Sustainability Amid a Pandemic,” writing, “Sustainability has become a business necessity, not just a differentiator.” The article posits that companies must pursue sustainable business practices to remain accepted by stakeholders and shareholders, and thus remain competitive.7 However, few comprehensive analyses exist of whether and how companies are placing climate priorities during the pandemic, or whether companies are giving their full attention to the pandemic.

A dataset of 2178 annual reports from 212 companies across 17 sectors over 11 years

The dataset includes Prime Standard companies over the time horizon from 2010 to 2020 and thus a total of 2178 annual reports from these years. The Prime Standard definition of Deutsche Börse serves as the basis for the selection of companies and assignment to sectors.8 The Prime Standard is a market segment of the Frankfurt Stock Exchange that includes all those companies that meet higher transparency standards than those of the legally regulated General Standard. All companies that were listed in the Prime Standard in May 2020 and were listed in the Prime Standard continuously from at least 2015 to 2020 were included. Thus, the annual reports of 212 companies from 17 sectors are in our exclusively compiled dataset. This hand-selected dataset enables various analyses over time from 2010 to 2020.

Initial NLP analyses: How important is climate change to businesses during the Covid-19 pandemic?

Of course, the dataset also provides extensive textual data for comprehensive NLP analyses. Since this dataset is new in this set, we use the transparent approach to an analysis presented below to offer initial insights into the dataset.

Since the Finite Pool of Worry refers to the worry of individuals, and thus worry, as self-reported personal and subjective fears about specific issues, is directly linked to the limited emotional capacity of individuals, we will speak of attention rather than worry in the case of companies. Decision-making structures in companies may differ from those of individuals and may even be influenced by individual actors in sum. To clearly distinguish the concern of individuals from the decision-making of firms, we now use the word attention rather than concern.

The following analysis examines corporate and sector attention to two issues: Climate Change and Pandemic. Corporate attention to these issues is quantified according to Sisco et. al. (2020).5 This procedure thus follows the approach already used in that study to measure attention in social media and news. Specifically, attention is measured as the percentage of keywords of a topic in a year, based on all keywords of the respective topic.

Climate change remains in the focus of companies despite the pandemic

Before the COVID pandemic, attention in the media sector in particular increased by a factor of 68 compared with the average attention of the other sectors. The consumer and financial services sectors ranked second and third, respectively, with respective increases in attention of nearly 32 and 23 times above average. In terms of pre-pandemic increases in sustainability terms, the software sector brings up the rear with a drop of nearly 16 times less than the sector average in the previous year. The values were measured between 2015 and 2016. Between these two years, attention regarding the topic of sustainability increased by just 3% on average.

The graph shows how attention is distributed over the years. Between 2010 and 2016, attention to the issue of climate change stagnates. From 2016, attention increases steadily.

Attention to climate change increases steadily, even during the pandemic. The highest attention to climate change can be measured in 2020. For example, attention to climate change increased more than 30% from 2019 to 2020, although during the same period attention regarding the pandemic issue increased dramatically by more than 1,000%. Already in 2019, attention to pandemic increased by 2,300% in contrast to 2018. The companies with the largest increase in attention to climate change are predominantly in the industrial sector, while companies with the highest attention to pandemic are in the transportation & logistics sector. Companies in the Insurance, Utilities, Chemicals, and Media sectors are addressing the pandemic at above-average rates.

The graph shows how attention is distributed over the years. Between the years 2010 and 2018, the topic of the pandemic receives hardly any attention. However, in 2019 and 2020, this attention increased significantly.

Which sectors focus on climate change during the pandemic?

The changes in the rankings of the sectors after the emergence of the Covid-19 pandemic are interesting. Looking at companies from the media sector as the previous leader in the pre-COVID-19 period, it is noticeable that although they have displayed above-average attention, they have slipped from 1st to 4th place. The automotive sector stands out with a sharp increase in attention to climate change during the pandemic. Companies in this sector are almost 13 times more likely to address climate change in 2020 than the average Prime Standard company. A little way behind, the consumer sector finds itself in second place with nearly 4x the average growth in attention.

Prime Standard Companies Pandemic vs. Sustainability und Climate protection

During the pandemic, the sectors change their attention regarding the climate change issue. We compare a year without a pandemic (2016) with a year at the time of the Covid-19 pandemic (2020). For both years, we calculate the change in attention per sector compared to the previous year. We use this change in attention to rank the sectors in each year. In the table, we show the changes in the ranking of the sectors. For a better classification, we list a well-known example company of the corresponding sector in each case.

The pandemic is changing the transportation industry - more home office and general restrictions are reducing travel activities worldwide. The automotive sector seems to pay special attention to the positive connotation of sustainability during the pandemic. On the other hand, the pandemic has led to a very strong upswing in retail business, especially online business. 9 Interestingly, the retail sector finds itself in last place in the ranking of increases in attention in 2020 compared to 2019. From the comparison, the picture that emerges is that some sectors seem to place sustainability topics in particular during times of the pandemic.

Limitations of the data set and the results

The increasing attention to the topic of climate change already since 2016 should not come be surprising. The Act to Strengthen Non-Financial Reporting by Companies in their Management Reports (also: CSR Directive Implementation Act) plays an important role here. Since 2017, listed companies with more than 500 employees have had to address material non-financial aspects of the company’s activities, which includes, for example, information on greenhouse emissions or renewable energies.10

The companies analyzed in the Prime Standard are subject to change. The analysis is based on companies listed in the Prime Standard in May 2021. Also, the quantification of attention may not be accurate. If terms such as “covid” and “pandemic” are next to each other, they will be counted as two individual terms, although in this case one could also speak of a single mention. In addition, the length of annual reports, i.e., the number of words or pages, may have an impact on the quantification of attention. For example, companies with shorter annual reports might not have as many mentions of pandemic and climate change issues because they generally keep their reports shorter. In general, mentions of pandemic and sustainability need not be directly related to actual company decisions.


Scientists have shown that the importance of the climate change issue measured by their individual concern for citizens does not diminish during the Corona pandemic. Our NLP analysis adds to the body of knowledge that companies also continue to focus on climate change despite the pandemic. Our result shows this increased attention even across sectors, but differences exist between sectors. The automotive sector shows the largest increase in attention to the issue of sustainability with the advent of the pandemic compared to a non-crisis year. It does not show a decrease in attention to climate change, as it did in 2008 during the economic crisis.

“The crisis has shown that society is capable of finding new solutions when limits are pointed out,” says Maja Göpel in her presentation at the 13th German Sustainability Day in Düsseldorf.11 Scientist Richard Florizone, President and CEO of the International Institute for Sustainable Development, also sees the pandemic as a mobilizing force worldwide. In his opinion, however, it is currently difficult to say to what extent the Covid-19 pandemic will strengthen the focus on sustainability, since we are still in the midst of the pandemic. However, the willingness to change makes him look positively ahead.12 We can thus add that not only society but also Prime Standard companies are using the pandemic as a mobilizing force to pay close attention to climate change. It is not yet possible to assess whether this resource-saving development is sustainable. Compared with the decline in emissions during the financial crisis in 2008, they increased again.

Free access to the data set of all Prime Standard annual reports

What other insights can be gained from annual reports? In addition to the semantic analysis of flow texts, entities such as organizations, persons or places can be identified in order to build possible connections between companies as knowledge graphs.

Please contact us at info@konfuzio.com and briefly tell us about your interest to analyze this dataset. After a brief review, we will give you access to this data.

Image credits13

Finite Pool of Worry und andere Quellen