Stock exchanges are best on sustainability reporting, says Aviva
European stock exchanges are among the world’s best when it comes to sustainability reporting, according to a data released today by Aviva Investors.
In the report ‘Trends in Sustainability Disclosure: Benchmarking the World’s Composite Stock Exchanges’ produced in partnership with CK Capital, Aviva said that while a number of European stock exchanges reflect high level of integrated sustainability reporting, only 52 out of 4,001 mid large and mega cap companies are engaged in ‘complete’ first generation sustainability disclosure.
In the ranking of the world’s composite stock exchanges by overall sustainability disclosure, the Netherlands are first, followed by Denmark, Finland, Spain and South Africa.
The Nordic countries rank particularly well with four countries appearing in the top ten while the two best performing emerging market exchanges are South Africa and Brazil.
While the majority of global mid, large and mega-caps engage in some form of first generation sustainability reporting, the report showed that the proportion of companies voluntarily disclosing each of the first generation indicators is slowing.
“Our study shows a clear divergence across exchanges and sectors on the level of disclosure on sustainability issues and growing evidence of a slowdown in the uptake of sustainability reporting practices. This reflects the lack of a co-ordinated reporting framework,” said Steve Waygood, chief responsible investment officer at Aviva Investors.
He added that investors are increasingly demanding sustainability information from companies to inform their broader decision making, deepen the quality of market information available and ultimately the quality of our capital markets and that this decline is cause for concern.
“This study shows that while the majority of the world’s largest companies by market capitalisation report some first generation sustainability indicators, the actionability of this data for investors and other stakeholders is constrained by a lack of completeness, standardisation and timeliness,” said Doug Morrow, vice president of research at CK Capital and lead author of the report.