IR websites: Asia leads ESG information disclosure

Jul 03, 2018
Fifty-nine percent of companies globally include information on social responsibility practices on their website

Only 45 percent of companies in North America feature a section on sustainability and corporate responsibility practices on their website, according to IR Magazine’s latest research report on IR websites.

Findings from the survey, which quizzed both IROs on their website’s set-up and members of the investment community on their expectations, reveal that at 71 percent, Asian firms are most likely to include ESG information on their IR website, closely followed by European companies at 70 percent.

‘The relatively low amount of sustainability and corporate responsibility content on North American websites, compared with those in Europe and Asia, reflects the fact that these topics have historically been a lower corporate communications priority in general in North America – particularly the US – than they’ve been in Europe, for example,’ explains Scott Payton, managing partner at Bowen Craggs.

This correlates to the views of analysts and investors on the subject. Asked to rate the importance of different types of information being directly accessible on a company’s IR website on a scale of 1-5 – where 1 is ‘not important’ and 5 is ‘very important’ – respondents score disclosure on social responsibility policies at 2.9 globally. This compares with scores of 4.4 for corporate and regulatory press releases, 4.3 for a named IR contact and 4.2 for a schedule of upcoming events and reports.

Investors and analysts from Asia rate ESG information at 3.2 out of 5, compared with 2.7 for both North America and Europe. Also rating the information at 3.2, fund managers, such as one North America-based-portfolio manager who says he ‘needs more ESG disclosure’, seem more interested than sell-side analysts, who rate it at 2.4.

Although North America has been slow to address sustainability messaging, things have been improving, according to Payton. ‘Over the last year or so, we’ve seen a number of major US companies beef up their online sustainability and responsibility communications,’ he says. ‘Ford, for example, now has some of the most sophisticated online non-financial reporting content in the world. And Apple and Google have been expanding their online sustainability reporting substantially over the last couple of years. I know Amazon has also recently discovered a rising interest in online material about its sustainability activities.’

At 62 percent, North American IR websites are also more likely to include an FAQ section, when only half of firms globally do so, the research reveals. But ESG topics rarely appear in the list, as is noted by one buy-side analyst who advises firms to ‘have FAQs that cover financial and ESG questions.’

With climate change rising up the social, political and business agenda in North America, related issues are gradually filtering into the US investment community, Payton stresses. ‘So North American IR teams need to work increasingly closely with their sustainability communications colleagues and ensure their company’s website has clear and deep non-financial reporting data to complement their financial reporting.’

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