Good quality corporate reporting can play a strong role in establishing trust with investors and the community, the Australian Council of Superannuation Investors said.
According to ACSI CEO Louise Davidson, good quality reporting enables shareholders to make informed investment decisions and the community to judge whether its confidence in companies is well-placed or misplaced.
“Poor or missing information shows a disregard for stakeholders’ needs and is a signal of risk,” Davidson said.
In its annual review of sustainability disclosure, the ACSI observed an improvement in sustainability reporting over 2017, with evidence of a “core group of pacesetters” for good disclosure practices.
“However, although the leaders are getting better, other companies are demonstrating unacceptable complacency,” Davidson said.
She said twenty ASX 200 companies did not report on sustainability risks at all in 2017. Nine companies have not undertaken any sustainability reporting for two years in a row and were identified as “laggards” in the report.
“These companies are missing an important opportunity to demonstrate that they are serious about managing sustainability risks and opportunities,” she said.
Davidson said ACSI again found that investors favoured companies with high disclosure standards.
“Eighty-three cents in every dollar invested in the ASX 200 is invested in entities that report to a ‘leading’ or ‘detailed’ rating,” she said.