Sustainability Disclosures Fall Short

Source: CFO, 7 December 2016

Sustainability is still far from the top priority for most investors, but environmental factors can have material impacts on the health and longevity of a company. By increasing energy efficiency, for example, companies can bring down operational costs. Effectively managing resources, in another example, can help companies avoid supply chain disruptions and price volatility. But how much material information on a company’s sustainability risks and opportunities is really available to the average investor? The inaugural State of Disclosure report published by the Sustainability Accounting Standards Board finds that sustainability reporting is increasingly becoming a norm in SEC filings, but the environmentally minded investor shouldn’t hold his breath. There’s a long way to go before such reporting becomes as robust as other kinds of disclosures.

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