Signatories representing $650 billion assets under management have signed up to a statement which asks emerging market companies for improved sustainability disclosure. The coalition made up of investment managers, institutional asset owners and NGOs has been organized by SIRAN (Social Investment Research Analyst Network), a working group of the Social Investment Forum (SIF).
The coalition made up of investment managers, institutional asst owners and NGOs has been organized by SIRAN (Social Investment Research Analyst Network) and the International Working Group, both working groups of the Social Investment Forum (SIF), as well as Calvert.
GRI has backed the initiative, as have UNPRI, CERES and the Association for Sustainable and Responsible Investment in Asia (ASrIA).
“The increased demand from the investment community for sustainability information particularly from emerging markets is a welcome development” explains Sean Gilbert, Head of Strategic Initiatives at GRI.
This initiative comes on the back of a major new study on sustainability reporting in emerging market companies published by SIRAN last month. Seventy five companies from seven countries were included in the study which was conducted for SIRAN by the independent investment research firm KLD Research and Analytics, Inc.
The study found that nine out of ten firms now offer at least some sustainability disclosure, while only 27 percent of the surveyed firms made use of the GRI Guidelines, the worldwide standard for sustainability reporting. South Africa led the pack in terms of disclosure. China on the other hand, was found to have the greatest room for improvement. Despite the clear benefits of sustainability reporting, the concept is relatively new in these markets and yet to become a common practice.
The study and the coalition statement signals growing expectations placed on emerging market companies by the investment community.
More and more mainstream investors have signed up to the sustainability reporting agenda as they realize that financial disclosure requirements do not reveal all the risks associated with the activities of companies. Social and environmental performance information can provide further information on the risks and liabilities of an organization and indicate the long term sustainability of businesses. Investors also are beginning to understand that a commitment to sustainability can contribute to financial success through improving internal efficiency and strengthening brand positioning in the competitive international marketplace.
Download the Investor Statement here.
Read Sustainability Reporting in Emerging Markets: An analysis of sustainability reporting in selected sectors of seven emerging market countries.
Katherine Miles Hill
Communications Coordinator GRI