In its annual review of sustainability disclosure, the Australian Council of Superannuation Investors (ACSI) found the sustainability reporting of 43 per cent of ASX200 companies to be basic or non-existent.
The report said this means their reporting does not provide investors with any of the information needed to make informed investment decisions.
ACSI said there are four persistent “laggards” that have neglected to report on sustainability risks to any extent for four or more consecutive years.
However, according to the research, a number of companies have continually outperformed with respect to their reporting practices, enhancing their sustainability reporting in line with “emerging best practice and changing stakeholder and company needs”.
ACSI found there were 25 companies considered to have reported at the highest level for four or more consecutive years.
Gordon Hagart, ACSI chief executive, said companies need to explain the risks relevant to their business and their industry and demonstrate how they are managing them for investors to be able to effectively price and evaluate environmental, social and governance issues as “part of their analysis of existing and potential investments”.
“This information is also a crucial input into investors’ processes for engaging with companies and exercising their ownership rights,” said Mr Hagart.
This year’s research is showing a trend in the right direction, with almost 40 per cent of companies now rated in the top two categories of ‘comprehensive’ and ‘detailed’, he added.
