Do Investors Care About Companies' Climate Change Disclosure?
Taken at face value, more evidence surfaced this month supporting a close relationship between company market performance and the disclosure of environmental, social and governance criteria. Less clear is when more investors will reward ESG disclosure and inspire nondisclosing companies to get on board. Integrating fundamental equity analysis with ESG criteria boosts the quality of investment decisions, according to the Principles for Responsible Investment.
A similar assessment by Deloitte outlines both the short- and long-term implications of ESG investment management. Further, the Carbon Disclosure Project now has 722 institutional investors representing $87 trillion in assets requesting companies to report their carbon emissions and climate change strategies. This same investor group is also asking companies to report on water and forest use, reflecting a heightened awareness of natural capital and environmental costs.
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