Global investors are increasingly sceptical of the sustainability performance metrics reported by companies, according to PwC’s 2023 Global Investor Survey.
The survey, which polled 345 investors and analysts, found that over nine in ten investors believe corporate reporting on sustainability performance contains unsupported claims.
This is up from the 87% in the previous survey voicing their concerns over greenwashing.
Despite this, the importance of environment, social and governance and sustainability issues remains high with around 70% noting that companies should integrate ESG directly into their corporate strategies.
In addition, 75% consider the management of sustainability-related risks and opportunities a crucial factor in decision-making.
Roughly 69% also indicated a likelihood to increase investments in companies adept at handling sustainability concerns relevant to their business performance and prospects.
Similarly, 67% would boost investment in businesses altering their conduct to positively impact society or the environment.
However, the report notes a trend of increasing neutrality among investors on these issues compared to the previous survey in 2021, suggesting a more cautious approach in their sustainability-related decision-making.
The PwC survey also highlights investors’ demands for more rigorous regulatory sustainability reporting standards.
About 57%, believe that compliance with regulations such as the Corporate Sustainability Reporting Directive (CSRD), SEC climate disclosure rule, or ISSB standards would significantly meet their information needs for informed decision-making.
Moreover, 85% believe that reasonable assurance would increase their confidence in sustainability reporting.
Nadja Picard, partner, global reporting leader at PwC Germany and co-author of the report, highlighted the need for more consistent reporting from companies, particularly on climate change.
James Chalmers, global assurance Leader at PwC UK and co-author, pointed out the evolving expectations of investors.
He stressed the need for corporate reporting to evolve, providing reliable, consistent, and comparable information to investors and other stakeholders.
“Sustainability is clearly on the minds of investors, and they are pressing to understand how companies incorporate sustainability considerations into strategic decision-making, risk management and their financial statements,” they said.
“Investors want to know how a company’s sustainability plans square with its business model and, ultimately, its prospects for creating long-term value.”
© Markets Media Europe 2023
