New York, October 25, 2016 – Investors are increasingly interested in a company’s non-financial disclosures – and while environmental, social and governance (ESG) reporting has become mainstream for companies, there is a disconnect between what companies are disclosing and what investors actually want to know, according to PwC’s new report, Investors, corporations and ESG: bridging the gap.
“The percentage of S&P 500 companies issuing sustainability reports has jumped to 80 percent in 2015 compared to 20 percent in 2011,” said Sara DeSmith, US Sustainable Business Solutions Assurance Leader at PwC. “With this increased reporting comes added expectations from investors on what these findings mean for them when taking stake in a company. The stakes are high for both parties, and it’s necessary to bridge that gap to figure out the best way to work together on this initiative moving forward.”
The report, which is based on responses from both institutional investors and companies to gauge sentiment on ESG issues, uncovered key findings around the following themes:
Investors also expressed an interest in improving the quality of ESG information. Having the information certified or audited by an independent third party is one way. Thirty-six percent of investors said this would increase their confidence, compared to 43 percent of corporates. Thirty-six percent of investors also noted that having information incorporated into SEC filings to signal higher quality would help the case.
“Investor engagement is a critical tool, and companies should be having discussions with shareholders about ESG issues, listening to their concerns, and acting on their feedback,” said Paula Loop, Leader of the Governance Insights Center at PwC. “Companies need to tell a compelling story about their ESG endeavors to investors who want to know how these efforts are impacting the company’s risk profile and long-term growth.”
To download the report, please visit: www.pwc.com/us/ESGpulse
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