Sustainability issues are increasingly relevant to investors as they seek to integrate environmental and corporate responsibility factors in both current and future investment practices, according to research by PricewaterhouseCoopers.
Most investors anticipate considering sustainability concepts in at least some aspect of the investment decision-making process. In the last 12 months, 82 percent of respondents considered climate change and/or resource scarcity in future investment decisions, while 79 percent of investors considered social responsibility and/or good citizenship, according to PwC’s Sustainability Investor Survey.
These issues will continue to factor into investors’ future decision-making, with 87 percent expecting to consider climate change and/or resource scarcity over the next three years and 84 percent of investors expecting to do the same for social responsibility and/or good citizenship, according to the survey.
Some 73 percent of investors say the primary driver for considering sustainability issues is risk mitigation. Enhancing performance returns (52 percent of respondents) and avoiding firms with unethical conduct (55 percent) rank as other key drivers.
However, there is a demand for better information of sustainability. Investors are significantly dissatisfied with the current level of transparency and reporting of sustainability information with respect to US-listed securities, according to PwC’s survey. This disparity is most pronounced in the context of risk and comparability: 82 percent of investors were dissatisfied with the financial quantification of risks and opportunities, with the comparability of information (79 percent) and relevance and implications of sustainability risks (74 percent) following close behind.
The findings echo those from an earlier PwC report released in May. The report, which is titled 10 Minutes on Integrated Reporting, found that investors are increasingly considering non-financial factors such as resource scarcity and looking at a company’s integrated reporting to assess the risks and returns of a company. For example, 75 percent of global CEOs say that measuring and reporting total non-financial impacts contributes to long-term success.