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Unveiling Insights: A Deep Dive into PwC's Global Investor Survey 2023 - Part 2



Embracing sustainability is a significant, strategic imperative for companies aligning business commitments with investor expectations. In our quest to understand this more deeply, our in-house sustainability expert, Samuel Reis shares his insights. 

Join us as Samuel explores the symbiotic relationship between sustainability issues and corporate responsibilities, shedding light on how WWG products can be instrumental in aligning your business with a greener, more responsible future.


Stats from ESG Today

In a recent survey by PwC, some statistics were released that reflect the current state of reporting non-financial information. The survey consulted 345 investors and analysts across geographies, asset classes and investment approaches to gain insight into the factors that most affect the companies they invest in and cover.

Almost all respondents (94%) expressed concern that corporate reports on sustainability performance contain unsubstantiated claims. This finding has raised questions about the trustworthiness of the information that reaches investors, consumers, and other stakeholders who rely on precise and reliable information to make informed decisions.

With increasing pressure from consumers, the media and other stakeholders, businesses are compelled to adopt sustainable practices to remain relevant and competitive. However, this pressure has also led to unethical practices known as greenwashing, where companies make false or misleading statements about the environmental benefits of their products or practices.

Greenwashing is a severe concern for investors seeking more transparency about the costs of companies' Environmental, Social, and Governance (ESG) commitments and the impact of their portfolio companies on the environment and society.

To address this issue, many investors are turning to regulatory sustainability reporting regimes to ensure the credibility of the information they receive. Reliable and comparable corporate reporting is crucial to meeting investors' information needs and addressing greenwashing concerns.

According to the same survey carried out among investors, it was found that the majority of respondents, 75%, place significant emphasis on the management of risks and opportunities related to sustainability that a company has to take into account when making investment decisions. This highlights the growing importance of sustainability as a crucial aspect of a company's financial performance and investor confidence. Investors are, therefore, increasingly aware of the impact of sustainability on a company's financial performance and see it as a critical aspect of their investment strategy. This includes not only the social and environmental effects but also an indicator of a company's long-term viability and profitability. Investors are interested in seeing companies adopt sustainable practices that take into account the triple bottom line – people, planet and profit – to ensure they remain competitive in the market.

Sustainability is no longer a peripheral concern for investors but a core aspect of their investment decisions. Investors are increasingly scrutinising companies' sustainability practices and their impact on the environment, society and the economy. Companies prioritising sustainability are more likely to attract and retain investors, improve brand reputation and achieve long-term profitability.

PwC also reveals that the significance of regulatory compliance in providing companies with the information required to make informed decisions cannot be overstated.

Companies can meet their information needs for effective decision-making by adhering to regulations and standards such as the Climate-Specific Reporting Directive (CSRD), SEC climate disclosure rule, and International Sustainability Standards Board (ISSB) standards. It was found that 57% of companies can meet their information requirements by complying with these regulatory frameworks.

By complying in this manner, companies can produce reliable, accurate, and relevant information essential for effective decision-making. The regulatory frameworks provide a structured approach that companies can follow to obtain the information they need to make informed decisions. Adhering to these regulations and standards can significantly benefit companies. Companies can obtain relevant and accurate information that can drive growth and improve their bottom line by complying with these frameworks. Companies that comply with these regulations can enhance their reputation, which is crucial for building stakeholder trust.

The same survey reveals that the overwhelming majority of respondents, 85%, believe that independent verification of sustainability reporting is critical in ensuring the accuracy and credibility of such reports. This underscores the need for reasonable assurance, which can only be provided by a trusted third-party auditor, to build stakeholders' trust and ensure sustainability reporting's reliability.

Reasonable assurance is, of course, far better than Limited assurance when it comes to reporting. Reasonable assurance requires a closer examination of internal processes and controls, verifying the accuracy of metrics and disclosures, and ensuring balanced and relevant reporting. It limits greenwashing and ensures that the company does not unfairly focus on areas where it performs well.

Limited assurance relies more heavily on management representations and implications, with a lower emphasis on the verification of source documents and scrutiny of source data. By verifying reported data and information, third-party auditors help companies identify and address any discrepancies, inconsistencies, or errors in their sustainability reporting, leading to better decision-making, improved performance, and increased stakeholder confidence.


WWG Contribution

Investors increasingly seek credible sustainability reports to ensure the reliability of the information they receive. World Wide Generation offers a range of applications such as Company Tracker, Portfolio Tracker, and Assurance Tracker, among others, positioning our platform as a valid solution for collecting, disclosing and verifying non-financial information transparently and reliably.

As noted in the PwC article, many investors are turning to regulatory sustainability reporting regimes to ensure the credibility of the information they receive. Our Company Tracker product has been equipped with the main standards and frameworks, which include the aforementioned regulatory regimes, CSRD, ISSB and SEC climate change disclosure and thus bring greater transparency and credibility to the entire process. Company Tracker also enables reports to be generated and accessible to stakeholders to improve the transparency and reliability of sustainability data.

All data can be collected in real-time and visualised with supporting evidence and a "geo-referenced" chain of provenance, presenting who contributed the data and by whom it was verified.

One of the demands investors make is the need for reasonable assurance. This is why WWG developed Assurance Tracker; a product on which companies can conduct their assurance with any third-party verifier. Companies can collect, process, aggregate and share data from departments, regions, subsidiaries, sites, assets, branches and suppliers in preparation for filing and sharing their disclosure with stakeholders.

Our products eliminate the need for sharing via spreadsheets, PowerPoint or email. All data is collated with evidence and geo-referenced provenance using innovative data bots and distributed ledger technology, meaning assurers do not need to physically travel to validate each data point, saving time, cost, risk and emissions for insurers and the client.

The Assurance Tracker app provides the ability to upload assurance certificates to match up to the assured metrics as part of the client's disclosure, with real-time processing back to the client. At WWG, we see sustainability reporting as a chance to bring a business closer to the best version of its vision, rather than a heavy burden for companies. 

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