GLOBAL - Institutional investors with a total of $1.6trn (€1.2trn) in assets under management have written to 30 of the world's largest stock exchanges asking them to address inadequate sustainability reporting by listed companies.
Based on Bloomberg data, the letter also ranks individual listing authorities on a sustainability league table that assesses the current level of environmental social and governance (ESG) disclosure among listed companies.
Exchanges where a large number of companies are disclosing ESG data include EuronextParis, Tokyo Stock Exchange, Helsinki, Euronext Amsterdam, Euronext Lisbon and Borsa Italiana.
Australian Stock Exchange, NASDAQ GS, Korea Exchange, Santiago Stock Exchange and Philippine Stock Exchange are among the exchanges with the least number of companies disclosing this data.
A suggestion particularly advocated by Aviva Investors is a listing requirement for companies to consider how responsible and sustainable their business model is and put a forward-looking sustainability strategy to the vote at their AGM.
Paul Abberley, chief executive at Aviva Investors London, said: "Markets are driven by information. A lack of information as a result of limited or non-disclosure of ESG data makes it difficult for long-term investors such as us to assess the wider ESG risks and opportunities associated with a company.
"Stock exchanges can play a crucial role in helping to create more sustainable global capital markets because of their ability to directly influence and monitor the operations and strategy of companies seeking to access the equity markets. This can only be a good thing for investors."
The letter, signed by 24 investors, is part of a broader collaborative engagement initiative that was launched by Aviva Investors and facilitated by the UN-backed Principles for Responsible Investment in 2008.
It aims to encourage stock exchanges to consider how to improve the quality of sustainability reporting by the companies that list on their exchange.
Elsewhere, Deutsche Bank's Asset Management division has released its ‘Investing in Climate Change 2011: The Mega-Trend Continues: Exploring Risk and Return' report.
This fourth annual review of the climate change investment market points out that 2010 was the largest year on record for investment in clean energy and that, globally, the investment opportunity steadily continues to improve.