Investors call for APAC companies to agree a common ESG standard

Investors are frustrated by the quality of company reporting data on environmental and social issues

Companies in the Asia Pacific region need to agree a common reporting standard on ESG to improve investors’ ability to scrutinise and compare sustainability data.

That was the headline finding in a survey by the CFA Institute and Principles for Responsible Investment (PRI) following the analysis of responses at 23 workshops held between October 2017 and April 2018, and a survey of 1,100 financial professionals between September 2017 and July 2018.

The report entitled “ESG integration in Asia Pacific markets, practices and data” found that many investors are “concerned with the quality, accuracy and comparability of the ESG data they are using in their analysis.”

The poll of investors found that the integration of sustainability data in the region was still “in the early days” with few ways available of how to verify the information published.

“Investors need to understand how robust, accurate, and comparable the data they are using are and adjust their analyses accordingly,” the report said. “In addition, investors and companies need to work together to agree on the reporting of material ESG issues only and to promote the standardisation of ESG data.”

The report noted that governance was the ESG factor that investors were most likely to have integrated into their processes, with environmental and social factors gaining acceptance but from a low base.

In a statement, accompanying the report, a PRI spokesman said: “This report focuses on the current state of ESG integration in the APAC region.

“We hope that investors find this report and its companion reports useful and that these reports help investors learn how they can better integrate ESG data into their analysis and investment decision making.”

The full report is available here.