Greenwashing remains a perceived issue among investors.
More than nine in ten investors (94%) believe corporate reporting on sustainability performance contains some level of unsupported claims, indicating a strong undercurrent of doubt around the reliability of sustainability reporting and information that they use—often referred to as “greenwashing”, said PwC recently.
PwC’s 2023 Global Investor Survey queried 345 investors and analysts across geographies, assets classes, and investment approaches for insights into the factors that most affect the companies they invest in and cover, the firm noted.
The percentage of investors believing unsupported claims in sustainability performance is higher from the 87% last year, PwC pointed out.
In addition, 15% of respondents indicated that they believe unsupported claims are there to a “very large extent” while those indicated a moderate or greater extent is up one percentage point on last year at 79%, the firm added.
These perceptions of greenwashing may explain why investors are looking to regulators and standard setters to create clarity and consistency in companies’ reporting, PwC said.
The firm pointed out that 57% of investors said that if companies meet the upcoming regulations and standards (including CSRD, the SEC proposed climate disclosure rules in the US, and ISSB standards), it will meet their information needs for decision-making to a “large” or “very large extent”.
In addition, 85% say that reasonable assurance (akin to audit of financial statements) would give them confidence in sustainability reporting to a “moderate”, “large”, or “very large extent”, the firm added.
Other survey highlights
The focus of investors on meeting the cost of ESG commitments has also risen, with 76% finding this information important or very important.
- The focus of investors on meeting the cost of ESG commitments has also risen, with 76% finding this information important or very important.
- Investors also want information on a company’s impact on society or the environment, and of those, 75% agree that companies should disclose the monetary value of their impact on the environment or society, up from 66% in 2022.
- Sustainability also continues to remain pivotal to investors—75% say that how a company manages sustainability related risks and opportunities is an important factor in their investment decisions, although this is down 4% on last year, PwC said.
- While macroeconomic and inflationary concerns are still top-of mind, they have eased from 2022’s highs.
- Notably this year, climate risks have risen considerably, putting it on par with cyber risk – at 32%.
- All the while, the survey paints a picture of an investment landscape driven by technological transformation: 59% identified technological change as the most likely factor to influence how companies create value over the next three years.
- In particular, 61% say faster adoption of AI is “very” or “extremely important”.