New Sri Lanka sustainability guide helps to lure investments, cut costs
ECONOMYNEXT – Adopting environmental, social and governance (ESG) factors should help Sri Lankan listed companies attract in investors and cut costs, according to a new guide by the Colombo Stock Exchange.
With its focus on capital market communication, the guide is specifically written with the investors’ and analysts’ perspective in mind, the CSE said.
According to the Global Sustainable Investment Alliance (GSIA), assets valuing over US$ 21.4 trillion have incorporated ESG concerns into their investment selection and management globally, representing 30.2 percent of the total assets under management.
The CSE guide is meant to help companies on how to approach the topic of sustainability when they incorporate it into their capital market communication.
Reporting on ESG will help attract Investors seeking sustainable investment opportunities, the CSE said.
According to findings from the Sustainable Stock Exchanges (SSE)1, there is now more data available from academic and investor research, which suggest that ESG issues have a material impact on investments.
“Large institutional investors have started to integrate ESG matters in their financial decision making and investment processes,” the CSE said.
Regulatory bodies from around the world are uplifting the importance of ESG disclosures to the corporation to strengthen market procedures.
“This enables such countries to attract new investors that consider ‘sustainability’ as a key facet of their investment decision making process,” the CSE guide said.
A number of leading market regulators have already put in place in-depth frameworks to report sustainability.
“Reporting on ESG will generate financial value for the company by identifying opportunities for cost savings, revenue generation and risk mitigation,” the CSE said.
“Continuous improvements on accountability and fostering collaboration with stakeholders will help companies to improve their image, which in-turn has the potential to positively impact its profitability.”
(COLOMBO, March 19, 2018)