Only one-third (33%) of investors think the quality of ESG reporting they see is good, with under half (40%) trusting the information they get from ESG ratings and scores, said PwC recently when releasing results of a survey on ESG reporting.
In addition, 74% of investors said their decision-making would be better informed if companies applied a single set of ESG reporting standards while a similar number (73%) say it’s important to be able to compare ESG performance across companies.
According to the company, the PwC 2021 Global Investor Survey captures the views of 325 investors from around the world, primarily active asset managers and analysts with investment firms, investment banks or brokerage firms.
An additional 40 in-depth interviews were conducted globally with investors and analysts having more than a combined US$14 trillion assets under management, the firm added.
- Investors increasingly want to hear more from companies about their ESG-related commitments, with 83% stating it is important that ESG reporting provide detailed information about progress toward ESG goals.
- 79% of those surveyed said they place more trust in ESG information that has been assured, and 74% think it’s important that reported ESG-related metrics are independently assured, with 73% wanting this to be done at the same level as the financial statement audit.
- Reducing Scope 1 and 2 greenhouse gas (GHG) emissions was the most cited (by 65%) ESG issue for companies to prioritise.
- 82% of investors said it is important that ESG reporting explains the rationale for a company’s environmental commitments, along with detailed plans on how to reach them.
- Ensuring worker health and safety (44%) and improving workforce and executive diversity, equity and inclusion (37%) are other priority ESG considerations identified.
- A high percentage of investors (82%) said ESG needs to be embedded in the corporate strategy, and by a wide margin (66%) respondents said they are more confident ESG issues are being addressed if someone in the C-suite is accountable.
- More than half of those respondents (53%) think it should be the CEO.
- Almost half of investors surveyed (49%) express willingness to divest from companies that aren’t taking sufficient action on ESG issues.
- More than half, 59%, also say lack of action on ESG issues makes it likely they would vote against an executive pay agreement, while a third say they have frequently taken this action.
- A large majority, 79%, say the way a company manages ESG risks and opportunities is an important factor in their investment decision making, with over three-quarters (76%) considering a company’s exposure to such risks and opportunities as a way to identify and weed out potential investments.