More disclosure of climate strategies needed
Institutional investors have shown a growing appetite for green assets and have put more pressure on companies to disclose their climate-related strategies, according to HSBC study.
The study, which surveyed a thousand companies and institutional investors globally, found that 68 per cent of global investors intended to grow their low-carbon related investments while 56 per cent said that companies’ transparency levels were still ‘highly inadequate’.
According to the study, only 53 per cent of the surveyed companies had a strategy in place to reduce their environmental impact however only 43 per cent of them did actively disclose their strategies.
Investors in Europe showed the strongest interest in low carbon investments and were followed by investors from the Americas and Asia.
At the same time, the Middle East was the only region which saw an annual decline in this trend.
Europe also led the way in terms of the number of companies (64 per cent) that did disclose their environmental strategies however it was Asia that showed the highest increase in both environmental strategy disclosure and the level of climate related disclosure.
The study also found that one of the reasons why the companies were not willing to disclose their environmental strategies was the lack of any clear competitive advantage from doing so, specifically with regard to the cost of funding.
HSBC’s group head of strategy and global head of sustainable finance, Daniel Klier, said: “The global transition to a low-carbon, clean energy economy is now firmly underway, yet companies and their investors are clearly travelling at different speeds.
“If we are to direct the world’s capital towards low-carbon investment opportunities then we need to break through the barriers currently inhibiting its flows.
“This will require improvements in the availability, reliability and comparability of climate-related information.”
AUTHOR
Oksana Patron
Recommended for you
Money Management examines the share price of financial advice licensees over one year to 31 March, with M&A actions in the final quarter having a positive effect for two licensees.
A $3.5 million settlement for victims of Melissa Caddick has been approved by the Federal Court following an initial agreement last December.
The Reserve Bank of Australia has delivered its first rate decision since the introduction of a new board structure last month.
Digital advice provider Otivo has launched an interactive tool, powered by artificial intelligence and Otivo’s own advice engine, to help answer client questions.
