Environmental performance is being considered by investors, but the quality of sustainability data lags far behind that of financial information
European investors are increasingly using sustainability reports for information on companies’ non-financial performance, but most believe the current level of disclosure is inadequate and the majority would like integrated reporting to become the norm. These are the headline findings from a survey by investment analysts Eurosif and accountancy body ACCA.
The research reveals that 89% of the 94 investors polled regard reports detailing firms’ environmental and social performance as “essential” or of “high importance” when it comes to taking investment decisions, with 67% saying they always examine sustainability or corporate social responsibility (CSR) reports.
However, more than three-quarters (78%) of respondents claim that current disclosure levels are not adequate, while 73% believe that sustainability and CSR reports do not sufficiently reflect business strategy or risk.
More than 90% criticise the level of comparability between reports and 84% agree that more companies should use established standardised reporting frameworks for non-financial disclosure.
Overall, 92% of those polled want better integration between financial and non-financial information.
François Passant, executive director at Eurosif, said: “Looking at non-financial aspects of a company is becoming the new norm for investors. However, a disconnect exists between a company’s non-financial reporting and investors’ expectations.”
In April, the European Commission put forward proposals for mandatory disclosure of non-financial information by all large companies in the EU. The plans would require firms to disclose information on environmental issues, social/employee matters, human rights issues and anti-corruption activities.
