Corporate sustainability reporting

3 March 2020

Companies’ activities have an impact on the world around them in ways that may not be priced into their market value. Their operations may in turn be affected by changes in their surroundings, either physical or social. How companies manage their use of natural and social resources can have a bearing on their ability to create value. As a long-term, global investor, we benefit from information on companies’ exposure to sustainability risks, how these are managed, and relevant performance metrics.

Corporate sustainability reporting is growing, but needs further standardisation to ensure relevance and comparability. A good next step would be reporting requirements based on a core set of globally accepted, financially material and standardised sustainability metrics. Over time, a coherent standard responding to the needs of both investors and other stakeholders is needed.

Sustainability disclosures should be subjected to similar internal governance procedures as financial disclosures, with a final sign-off from the board. As a starting point, companies can look to the industry-specific standards developed by SASB, and base broader social and environmental disclosures on the GRI Standards. Our public expectations of companies on selected sustainability topics provide further guidance.

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