www.datamaran.

com

DATAMARAN COVID-19 UPDATE

April 9, 2020

COVID-19: companies disclosing specific actions to mitigate risks

Key highlights of this Executive Summary:

• Certain sectors, such as Food & Beverage, are reporting a high proportion of specific risk
mitigation activities, whereas other sectors, like Infrastructure, are only acknowledging the
crisis without additional substance.
• Overall reporting trends show major leaps in disclosure in the last two weeks, especially
in Europe. This indicates that as the crisis has worsened, companies have more actively
incorporated details in their disclosures.
• Common factors of governmental intervention around the globe include limiting freedom of
movement; closing commerce with the exception of ‘critical infrastructure’ e.g. supermarkets
and pharmacies; closing educational establishments; providing paid leave to people affected by
the pandemic; provisions and protocols for healthcare workers and treatments; and economic
support for unemployment and small- to medium-sized business.

Just three months after the COVID-19 outbreak began, many businesses worldwide have been
working to measure and understand the impacts of the coronavirus pandemic. Having reliable
information about how key stakeholders - including companies, regulators, and policy makers
- are responding is more important than ever in order to make better decisions in the face of
uncertainty.

That’s why, in addition to these Executive Summaries, Datamaran developed a live COVID-19
Disclosure and Regulation Tracker, which will be updated automatically on a weekly basis.

With this Tracker, Datamaran clients have access to timely, data-driven insights that will inform
strategy planning, risk management, and sustainable business practices. It highlights regulatory
and financial disclosure developments with a focus on risk management.

There are two main sources of analysis: regulatory initiatives and corporate financial reports. The
first provides an overview of the current regulatory landscape as related to COVID-19, with initial
focus on where our clients are predominantly located (USA and Europe).

The latter is the gateway to a meaningful analysis of corporate financial disclosure, focused on
risk management stages and the specific mitigation areas companies have been addressing.
Here you will find relevant analyses, mitigation areas, and corporate disclosures extracted from
financial reporting for reference and reflection.

Key takeaways from the Tracker are summarized below.

www.datamaran.com

Datamaran COVID-19 Update | April 9, 2020 | www.datamaran.com 1

© Datamaran, Ltd. All Rights Reserved
 www.datamaran.com

Analyzing corporate disclosure: different industries at different stages of risk

management

As promised in the last update, Datamaran has analyzed corporate financial reports to identify
specific risk management disclosures and activities. This considers the risk management stage
disclosed by companies - from identification to assessment, mitigation and ultimately, monitoring
- as well as the specific areas in which companies have disclosed measures to mitigate COVID-19
related risks. These risk management stages provide a useful benchmark for understanding
corporate preparedness, responsiveness, and the specific actions taken.

The graph below shows how early-reporters in certain industries are already disclosing their
risk mitigation activities. In the Food & Beverage, Transportation, and Consumer Goods sectors,
particularly, there are notably higher levels of mitigation disclosure amongst reporters in financial
documents (25% for the Food & Beverage sector and 17% for each of the other two). Meanwhile,
in Renewable Resources & Alternative Energy, no reporters have yet begun to move into this
stage.

Transparency around mitigation activities not only reassures investors, regulators, and others
that the company is proactively addressing the impact of COVID-19, but also indicates their
preparedness for a potentially worsening situation.

Datamaran COVID-19 Update | April 9, 2020 | www.datamaran.com 2

© Datamaran, Ltd. All Rights Reserved
 www.datamaran.com

Overall reporting trends

Since our previous update, released on March 26th, it is clear that companies are continuing
to respond quickly and transparently to the COVID-19 outbreak in their financial disclosures.
The percentage of US and European companies disclosing information on the coronavirus has
continued to increase - by 3% in the US and 10% in Europe. Non-uniform reporting cycles will likely
explain much of the difference as European companies typically file their annual reports later than
10-K submissions. The stronger guidance from ESMA advising European companies to provide
substantive COVID-19 disclosures in their annual financial reports may also be influential.

Beyond consistent growth in disclosure, we are seeing that while proportionally more companies
are including risk mitigation efforts in their annual reports than those filing 10-Ks, the proportion
of companies not making any acknowledgment of the coronavirus crisis in their annual report is
significantly higher. It wasn’t until the start of March that we saw more substantive COVID-19
disclosures in 10-K filings, with a marked spike in the number of companies making tangible risk
assessments and disclosing mitigation areas (see the graphs on next page).

Datamaran COVID-19 Update | April 9, 2020 | www.datamaran.com 3

© Datamaran, Ltd. All Rights Reserved
www.datamaran.com

Datamaran COVID-19 Update | April 9, 2020 | www.datamaran.com 4

© Datamaran, Ltd. All Rights Reserved
 www.datamaran.com

Regulatory developments

While businesses are grappling with managing the risks they are facing, policy-makers are working
to steer society and the economy through the crisis. A section of the Tracker is devoted to keeping
you abreast of need-to-know initiatives and regulatory developments.

Since the coronavirus was declared a pandemic by the World Health Organization (WHO),
governments have reacted quickly, adopting emergency legislation that aims to protect both
public health and the economy. While such measures were by and large designed with a temporary
nature in mind, governments have begun to extend them, some indefinitely. There is also a growing
compendium of COVID-19 initiatives being published by international organizations, IGOs, NGOs,
central banks, and others aimed at guiding companies through this crisis.

Common factors of governmental intervention around the globe include limiting freedom of
movement; closing commerce with the exception of ‘critical infrastructure’ e.g. supermarkets and
pharmacies; closing educational establishments; providing paid leave to people affected by the
pandemic; provisions and protocols for healthcare workers and treatments; and economic support
for unemployment and small- to medium-sized business.

Datamaran COVID-19 Update | April 9, 2020 | www.datamaran.com 5

© Datamaran, Ltd. All Rights Reserved
 www.datamaran.com

Some of the most important regulatory developments include:

1. France’s “Emergency Law no. 2020-290 of 23 March 2020”

2. Germany’s “Law for the Protection of the Population in an Epidemic Situation of National
Scope”
3. Italy’s “Decree-Law of 23 February 2020, n. 6”
4. Spain’s “Royal Decree 463/2020, of March 14”
5. The UK’s “Coronavirus Act 2020”
6. The US’s ”Coronavirus Aid, Relief, and Economic Security (CARES) Act”
7. The WHO’s most recent guidance entitled “Novel Coronavirus (2019-nCoV) technical guidance
(Infection prevention and control during health care when novel coronavirus (nCoV) infection is
suspected)”

The Tracker offers the ability to explore the above and all other regulatory initiatives in more detail.

What is coming next

As COVID-19 continues to spread in a growing number of countries, the information overload

due to the excessive quantity of (often unstructured) information becomes a further challenge
for companies. Datamaran will automatically update the live COVID-19 disclosure and regulation
Tracker on a regular basis, to help our clients to inform company strategy and support decision
making.

Using the tracker

This analysis demonstrates how an emerging issue - such as the COVID-19 outbreak - can rapidly
become financially material.

We encourage users of the tracker to examine industries and companies of interest in detail. Data
is broken down by: type of report by industry and region; companies reporting by risk management
stage; type of disclosure of time; total disclosures over time; internal risk ownership; and many
more. This tracker can be used for benchmarking, materiality, research, and as a repository for
coronavirus regulatory data.

About Datamaran
Datamaran is the market leader in external risk management. Entirely unique in its field, it is the
only software that supports a data-driven business process for monitoring emerging risks. Blue-
chip companies around the globe trust Datamaran’s evidence-based approach to inform their
materiality, risk management and decision-making processes.

Datamaran COVID-19 Update | April 9, 2020 | www.datamaran.com 6

© Datamaran, Ltd. All Rights Reserved