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Transparency or greenwashing: what do investors want to know?

How do environmental, social and governance (ESG) risk disclosures affect potential investment in a business – and how the company is perceived by investors and stakeholders? A study by Financial Executives International, in collaboration with Donnelley Financial Solutions, tells companies what investors want to know and what they should be disclosing.

The report – Transparency or greenwashing – came to the following conclusions:

  • investors want ESG information and are obtaining it from many different places;
  • having a sustainability programme and/or producing a CSR report are not the same thing as having a sustainable business strategy;
  • companies need to determine the most important sustainability and ESG issues for creating long-term value in their businesses;
  • big data is about to collide with sustainability and ESG to a large extent.

One of the investment managers interviewed in the study said: “Transparency plays a major role in driving increased investor interest in ESG topics.”

Another added: “As investors, we’re focused on identifying companies with long-term, sustainable business models. and more often than not, you can determine whether a company is truly focused on creating long-term value by looking at its approach to key ESG issues.”

Read more and download the full report here.


CTMfile take: Disclosing environmental, social and governance risks is becoming an increasingly prominent issue for companies and the impact of ESG on financial statements is an area of growing importance to investors.


This item appears in the following sections:
Sustainable Green Treasury
Sustainable Investing
Sustainable Risk Management

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