Is your nonfinancial performance revealing the true value of your business to investors?
Tomorrow’s investment rules 2017
Investors around the world reveal broad support for the environmental, social and governance-related themes expressed in a February 2016 memo from Laurence Fink, Chairman and CEO of BlackRock, to the leadership of the world’s largest companies. Investors strongly support Fink’s call for an annual board approved strategy statement for public companies.
They agree that environmental, social and governance (ESG) factors present risks and opportunities that have been neglected for too long. Yes, say investors, sustainable returns require a sharper focus on corporate governance and on environmental and social factors.
Disclosure and scrutiny of nonfinancial information will continue to grow in importance in the years ahead. The Paris Climate Conference agreement will lead to an increase in disclosures about companies’ climate practices and risk management strategies, say investors. They report that recent environmental and social scandals have driven them to reevaluate nonfinancial disclosures and look more closely at available information.
Nonfinancial performance plays a pivotal role in the investment decisions, for most of the surveyed investors, and for a greater percentage of investors than in previous years.
Despite the increasing importance placed on nonfinancial performance and disclosures, most of the surveyed investors evaluate environmental and social factors on an informal , not structured, basis.