The Financial Services Council (FSC) and Australian Council of Super Investors (ACSI) have launched a guide that helps companies improve and simplify their environmental, social and governance (ESG) reporting.
FSC chief executive John Brogden said the ESG reporting guide outlined the necessary information and data that investors, such as fund managers and superannuation funds, needed to accurately price, analyse and manage companies’ ESG risks.
“Institutional investors consider ESG factors to be critical to the long-term performance of the companies in which they invest,” Brogden said at the FSC Annual Conference on the Gold Coast yesterday.
Within the S&P/ASX 200 Index, 76 companies provided only basic ESG information, such as occupational health and safety statistics, while 15 per cent provided no ESG reporting – figures that “clearly are too low”, he said.
“The super funds and fund managers believe that is too little information from too few players in 2011,” he said.
“[The guide] allows the existing companies that provide information to do so in a more organised form that is more comparable, and this is a very gentle [reminder] to those who don’t begin to realise that this is a growing requirement of our members.”
ACSI chief executive Ann Byrne said the guide asked companies to publicly disclose information such as carbon emissions, energy use, health and safety statistics, and employee turnover rates.
“Over the last four years, our research in sustainability reporting has shown that while many companies have made progress on ESG reporting, most still struggle to grasp the concept of ESG risk exposure, how to measure it and how to manage it,” Byrne said.
The guidelines are voluntary for companies.
The publication was prepared jointly by the FSC and ACSI in consultation with organisations including the Australian Institute of Company Directors, Australian Shareholders’ Association, fund managers, superannuation funds and research houses.
