Is investor confidence being shaken by corporate greenwashing?


A recent survey conducted by PwC has revealed insights into investors’ perceptions of corporate sustainability reporting.

According to ESG Today, the PwC Global Investor Survey 2023, which included responses from 345 investors and analysts across 30 countries, sheds light on growing concerns about the authenticity of corporate environmental, social, and governance (ESG) claims.

The survey’s key finding is that an overwhelming 94% of investors believe that corporate reporting on sustainability performance often contains unsupported claims, a significant increase from 87% in the previous survey. This suspicion of greenwashing is accentuated with 79% of investors suggesting these unsupported claims are present to a moderate or greater extent.

Despite these concerns, the importance of ESG and sustainability issues remains high among investors. About 70% agree that companies should integrate ESG directly into their corporate strategies. Furthermore, 75% consider the management of sustainability-related risks and opportunities a crucial factor in decision-making.

Investors are also showing a willingness to support companies that effectively manage sustainability issues. 69% indicated a likelihood to increase investments in companies adept at handling sustainability concerns relevant to their business performance and prospects. Similarly, 67% would boost investment in businesses altering their conduct to positively impact society or the environment.

However, the report notes a trend of increasing neutrality among investors on these issues compared to the previous survey in 2021, suggesting a more cautious approach in their sustainability-related decision-making.

The PwC survey also highlights investors’ demands for more rigorous regulatory sustainability reporting standards. A majority, 57%, believe that compliance with regulations such as the CSRD, SEC climate disclosure rule, or ISSB standards would significantly meet their information needs for informed decision-making. Additionally, 85% express that reasonable assurance would increase their confidence in sustainability reporting.

Nadja Picard, Global Reporting Leader at PwC Germany, emphasized the need for more consistent reporting from companies, particularly on climate change. Meanwhile, James Chalmers, Global Assurance Leader at PwC UK, pointed out the evolving expectations of investors. He stressed the need for corporate reporting to evolve, providing reliable, consistent, and comparable information to investors and other stakeholders.

The survey also sheds light on other areas of investor interest, such as the cost of meeting sustainability commitments, the roadmap for meeting these commitments, and the impact of companies on the environment and society. More than half of the investors have resorted to incentives like linking ESG targets to executive pay, submitting ESG-related shareholder resolutions, and divesting from companies that fall short in sustainability action.

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