The importance of and how best to report on environmental, social and governance (ESG) issues remains uncertain, and what really matters appears to depend upon whether you are a corporate or an investor. The continuing difference of opinion on ESG matters is highlighted in a new survey from PricewaterhouseCoopers LLP titled Investors, Corporates and ESG: Bridging the Gap.
The survey finds that corporates view disclosing ESG data differently—corporates are focused on growth but investors are focused on risk. It is clear that sustainability reporting has become mainstream with 81% of S&P 500 companies publishing sustainability reports in 2015 compared to 20% in 2011.
Some key findings from the survey include:
- 65% of corporates say ESG issues are very important to the core business strategy
- 80% of corporates follow Global Reporting Initiative (GRI) standards for ESG disclosure reporting
- 31% of investors confirm that ESG data is very important to equity investment decisions
- 43% of investors would like to see ESG information reported using the Sustainability Accounting Standards Board (SASB) standards
A critical issue identified in the survey relates to trust and transparency of ESG disclosures. Corporates express 100% confidence in the quality of ESG information shared but only 29% of investors are confident in the quality of the ESG information received from companies.
The results of this new survey from PWC confirms that investors are increasingly interested in both financial and nonfinancial disclosures including information related to ESG matters. 36% of investors noted that having such information incorporated into SEC filings would ensure higher quality data. The SEC currently is considering corporate disclosures of ESG issues.