Not Disclosing ESG Data: Wall Street Journal

Investors prefer hearing about environmental, social and governance impacts from companies rather than surprise announcements from the media or government investigations. The term ESG investments was coined in 2005. “[W}hile companies that don’t disclose environmental and social data may not always lose investors, they are more often being passed over by new investors, in favor of firms with better disclosure practices, ESG investors say,” reports Maitane Sardon for the Wall Street Journal. Major institutional investors and firms that oversee trillions in assets send out standardized forms requesting specific details on carbon dioxide emissions, use of freshwater, deforestation as well as labor practices or waste management with follow-up when companies fail to respond. “Still, plenty of companies have resisted disclosure pressure from investors,” Sardon concludes. "Some say they aren’t able to collect useful information, for instance, while others say environmental and social issues don’t affect their financial performance. Midsize and small companies generally lag behind their larger peers in terms of disclosure because they are less likely to have resources.” Companies are more forthcoming on environmental and cybersecurity matters than on labor. Investors do not want horrible surprises on any issue. – YaleGlobal