How can the enterprise earn investor trust through sustainability disclosures?
Deloitte and The Fletcher School at Tufts University embarked on a global study, executed between January and December 2023, to understand how companies can enhance investor trust in their sustainability disclosures by delving into the minds of…1
- Chief Sustainability Officers looking to navigate increasingly complex regulatory environments, which require sustainability disclosures
- Chief Financial Officers who want to understand the impact of the organization’s sustainability commitments and disclosures on investor behavior
- Asset owners, investment managers, and investment advisers who seek access to trustworthy sustainability data
Investors are increasingly incorporating sustainability factors into investment decisions and are seeking an opportunity, with an estimated US$43 trillion in global economic growth projected between 2021 – 2070, if the world economy transforms to achieve net-zero emissions.2
- 83% of surveyed investors incorporate sustainability information into fundamental analyses
- 79% of respondents have sustainability policies in place, compared to 20% five years ago
Despite growing demand for sustainability information, investors report significant barriers in the clarity, consistency, and reliability of data. While regulations and standards are emerging globally to drive data consistency, they are not yet implemented broadly enough to provide fully reliable data to investors. Therefore, investors are most likely to use the information, data, and sources they trust, which include in-house data systems and audited or assured disclosures.
Strategically building trust with investors is critical for corporations seeking to stay ahead of the competition, grow market value, and gain access to capital. Therefore, corporate leaders have a strategic opportunity to strengthen their relationship with investors as the capital markets arrive at an inflection point driven by the transition toward a more sustainable world. Continue reading for access to interactive insights by region and country and download the Global and US reports for further analysis.
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Sustainable investing landscape
Integrating sustainability factors into investing decisions
Barriers to integrating sustainability data
Trust in data sources and usage
What makes investors distrustful is the fact that [investors] actually view [ESG] as a material risk and companies will sometimes use it as a marketing effort.
- Former Global Head ESG Capital Markets, European Bank
Four actions which can help earn investor trust in corporate sustainability commitments
Endnotes
- The research is based on a survey of 1,000+ investors, including asset owners, asset managers, and investment advisers in North America, Europe, and Asia. The quantitative data is supplemented by 10 interviews with sustainability investors.
- Pradeep Philip, Claire Ibrahim, Cedric Hodges, The Turning Point, a Global Summary, Deloitte, May 2022. Download the PDF for full report.
Jennifer Steinmann
