Six ASX companies start measuring ESG impact
Environmental, social and governance (ESG) tracking could make reporting easier for smaller companies listed on the Australian Securities Exchange (ASX), as six listed companies begin tracking their ESG progress using technology platform Socialsuite.
In September 2020 the World Economic Forum (WEF) proposed a universal framework for ESG measurement, however, small to medium Australian Securities Exchange (ASX) listed companies had struggled to practically measure and report ESG goals.
Socialsuite was attempting to remedy that with its technology platform that lets any organisation monitor their ESG impact, allowing for better ESG reporting for fund managers and retail investors.
Euro Manganese, Vulcan Energy, Elixir Energy, Minbos Resources Limited, Myfiziq and Whitehawk had all adopted the reporting technology.
Damian Hajda, Socialsuite co-founder, said it was traditionally used by non-profits to report the impact of their services to funders and help improve the services they’re doing in the community, so it could adapt any metric for measuring impact.
“ESG is becoming very important from the perspective that it’s not only investors that want to invest in ESG companies but it really leads to the success of the company because they can attract more ESG conscious capital,” Hajda said.
“They can attract more customers who vote with their wallets only, who want to deal with companies that are doing the right thing environmentally and socially, and now also attracting top talent.”
Hajda said the firm had spoken to fund managers about what they expected out of ESG reporting and what was previously lacking.
“They actually said that because ESG reporting is quite new, a lot of companies don’t have the internal capacity or the organisational capability to report ESG,” Hajda said.
“They all want to wait until they get perfect at it and most of the fund managers we spoke to said they just want to see ESG progress.
“They know that companies aren’t going to be ESG perfect from day one, so what they’d like to see is quarterly reports against the set of indicators that show the company making progress on a quarter by quarter basis to become best in class ESG.”
Vulcan Energy was aiming to become the world’s first producer of a zero carbon lithium products for the electric vehicle industry.
According to FE Analytics, Vulcan had returned 168.82% over the last month to 15 January, 2021, off the back of a successful announcement regarding a pre-feasibility study of a combined renewable energy and lithium hydroxide project in Europe.
Francis Wedin, Vulcan Energy managing director, said the company was growing exponentially and the reporting helped transparently represent the companies ESG progress to fund managers and other investors.
“It’s going to be important because we’re experiencing really rapid growth, so we’ve got to make sure that we grow in the right way,” Wedin said.
“We’ll always be reporting back these metrics and coming back to it every month to see how we’re tracking.”
AUTHOR
Chris Dastoor
Recommended for you
The exit of co-CIOs Andrew Clifford and Clay Smolinski from Platinum has highlighted key person risk, with Morningstar raising its outflow forecast to 33 per cent of FUM per annum in response.
Despite having entered into a scheme of arrangement with Bell Financial Group last week, Selfwealth has opted to now progress with a bid from rival Svava instead.
Platinum Asset Management has announced co-chief investment officers Andrew Clifford and Clay Smolinski are to step down from their roles.
ASIC has warned Australian retail investors there “will be product failures” in the private credit space as the assets are untested for a large-scale stress event, but has stopped short of discouraging retail participation.
