With newfound relevance, ESG metrics have quite suddenly popped onto the radar of mainstream corporations, investors, and boards. That’s not to say companies weren’t previously attuned to sustainable or ethical aspects of their operations, but rather that shareholders have started to consider ESG metrics in the course of their investment decisions. At least, that’s the idea…
Five years ago, only 20% of the S&P 500 was reporting ESG metrics. In 2015, that number more than quadrupled to to 81%.
Yet, the latest white paper from PwC’s Governance Insights Center suggests that there may be a disconnect between the information corporations are reporting and the information investors want/need.
Today’s boards are trying to find room for sustainability discussions within an already-full docket. Once boards find the time, the real question becomes, ‘What are investors really looking for?’
The PwC white paper follows a format that’s quite familiar to us—that is, to ask the investors themselves. The report titled Investors, Corporates & ESG: Bridging the Gap aims to close the gap between the corporate narratives of growth and the investor’s assessment of risk. The white paper explores the following:
- What ESG issues do investors want to know about?
- How important are ESG factors in equity investment decision-making?
- How easy is it for investors to compare ESG data across companies?
- Which disclosure standards (GRI, SASB, etc.) do investors prefer?
- How do investors assess the quality of the current data?
- What are the greatest obstacles to clear ESG communication between corporations and investors?
More Info on ESG Reporting
For those interested in more information on ESG reporting, don’t miss our resources below. In our most recent sustainability episode, Nasdaq’s Evan Harvey (Director of Corporate Responsibility) does an excellent job outlining ESG considerations for board members, who often define sustainability too narrowly and underestimate the impact.