Sri Lankan firms told to be relevant in sustainability reporting
ECONOMYNEXT – Sri Lankan listed companies have been advised to keep their environmental, social and governance (ESG) factors reporting focused and relevant and not overload stake holders with too much information.
Reporting on ESG, which refers to a set of standards for a company’s operations that socially conscious investors use to screen investments, can help attract investors seeking sustainable investment opportunities, the Colombo Stock Exchange said.
They cover a range of issues, from water and energy usage, greenhouse gas emissions to air pollutants emitted, climate change and biodiversity.
ESG reporting also includes social factors like labour standards, health and safety, and human rights as well as corporate governance, compliance and anti-corruption measures.
The advice, in a new ESG reporting guide by the Colombo Stock Exchange, comes at a time a growing number of companies are reporting on ESG, with annual reports becoming bulkier and even separate publications on sustainability and governance.
“Reading this guide will also encourage listed companies to focus and limit their ESG-related reporting to the content that is really material,” the CSE said.
“This is because investors and analysts are not interested in too detailed or irrelevant information.”
The guide seeks to navigate the issuer through the complex process of identifying the content that is appropriate and relevant to their capital market communication.
“Companies should not feel obliged to report on all indicators, all the time,” the CSE guide said.
Companies are only expected to report on ESG indicators which are considered to be materially relevant to their business and strategy.
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.
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 main argument for incorporating ESG factors into investment strategies is that these factors have a substantial role to play in creating or eroding shareholder value
(COLOMBO, April 24, 2018)