European companies set to fall behind on sustainability disclosure
European companies are set to fall behind emerging markets-based companies on sustainability disclosure according to new report from Aviva Investors.
The study carried out by CK Capital, Trends in Sustainability Disclosure: Benchmarking the World’s Stock Exchanges 2013, found that Europe performed favourably with Spain receiving top billing and eight of the top 10 spots going to other European exchanges. The rest of the top five went to Helsinki, Tokyo, Oslo and Johannesburg respectively.
However, the report authors say that these headline figures mask a trend across emerging markets in improvements in quantitative sustainability reporting practices.
Doug Morrow, md at CK Capital and lead author of the report said: “Emerging markets stock exchanges are on track to surpass their developed-world counterparts in quantitative sustainability reporting by 2015. This ‘catch-up’ process is being driven by many factors including policy leadership from stock exchanges themselves.
“Our analysis suggests that advanced disclosure practices are linked with mandatory, prescriptive and broad disclosure policies, and these can be implemented through stock exchange listing rules, capital markets regulations or by government legislation. Implementation of the European Commission’s proposals would undoubtedly contribute towards better sustainability disclosure across Europe.”
A total of 3,972 listed companies were assessed across 45 stock exchanges in 40 countries. Companies were assessed according to their disclosure against the seven “first generation” sustainability indicators: employee turnover, energy, greenhouse gases (GHGs), lost-time injury rate, payroll, waste and water.