PwC on Sustainability

Our monthly newsletter on sustainability trends and insights impacting your business

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May 2014

Investors are focused on sustainability issues. Are you giving them the info they want to understand your company?

Sustainability issues are a priority for today’s investors and will continue to become increasingly relevant as institutions seek to integrate environmental, social and governance (ESG) concerns in both current and future investment decisions. How prepared is your company to present a clear narrative to investors supported by good data? Our new survey of institutional investors shows that the influence of sustainability issues on investor decision-making is rising, primarily among large institutions that provide considerable capital, so it’s more important than ever to be proactive in communicating with them. The survey shows that providing the right information and quality data are issues that are on investors’ minds.

  • 82% of the investor respondents are already considering ESG issues in their investment decisions. 87% say they will consider issues such as climate change & resource scarcity in the next 3 years.
  • Investors’ primary driver for considering sustainability issues is to mitigate risk. When asked for the drivers of ESG action; 73% cited risk mitigation, 52% cited enhanced performance returns, and 55% are avoiding firms with unethical conduct.
  • Investors are “very likely” to request additional sustainability information from companies during the next year. 89% will ask for additional ESG information from companies in the next year, and 79% will seek meetings with portfolio company management teams.
  • Yet, investors want better ESG information from companies. 82% of investors were dissatisfied with the financial quantification of risks and opportunities, 79% dissatisfied with the comparability of information and 74% with the relevance and implications of sustainability risks.

So what's the overall message for companies? As ESG issues become more relevant to the investment decision and process, you will need to be prepared to answer incisive questions from investors about the ESG issues that are material to your business and how your sustainability strategy creates shareholder value for your company.


 

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