Reporting of major sustainability indicators by the world’s large listed corporations has slowed, leaving investors ‘in the dark’ when it comes to creating portfolios that take into account environmental and social issues, according to a study by sustainability adviser Corporate Knights and insurer Aviva.
Only 37 percent of the world’s 4,969 largest listed companies disclose their greenhouse gas emissions, one of seven key indicators, according to a 2015 study based on 2013 data. That’s down from 39 percent in the previous study. Meanwhile, only 10 percent of the companies disclose their injury rates, 12 percent their turnover rates, a fifth reveal waste generated per unit of revenue and 22 percent report on their water usage.
‘How can an investor – like the $197 bn Dutch pension fund PFZW, which has pledged to reduce its listed company carbon intensity by 50 percent by 2020 – decarbonize its portfolio when the majority of large companies in all sectors do not report their carbon emissions?’ writes Toby Heaps, CEO of Corporate Knights, in the report’s executive summary. ‘The answer is that it has to guess, filling in data gaps with estimates that are often less than reliable.’
The report, which also covers sustainability reporting by stock exchanges, ranks NASDAQ OMX Helsinki as number one for the second year in a row in terms of disclosure, with all 19 of its large companies reporting greenhouse gas emissions and energy use. When disclosure of its 19 large companies is tallied, it receives a score of 89.1 percent.
Euronext Amsterdam comes second, with 85.5 percent, followed by NASDAQ OMX Copenhagen with 75.6 percent and the Australian Securities Exchange with 73.6 percent. The London Stock Exchange ranks fifth with 73.2 percent. No North American or Asian stock exchanges make the top 10.
Mark Wilson, group CEO of Aviva, calls for more regulation in a foreword to the report. ‘It is clear regulation in this particular area leads to more disclosure than voluntary mechanisms,’ he writes. ‘This is not a surprise. But what is surprising is the lack of focus on this area among national governments. We have guidance aplenty but a general lack of action, especially outside the European Union.’
