’Better data needed’ on measures of sustainability in business

Oxford research shows increasing numbers of investors want better reporting on the environmental, social and governmental (ESG) factors that affect performance so they can make more informed decisions on where to put their money. These factors are the main way of measuring the sustainability and ethical effect of an investment in a company or business. A new study by Bob Eccles, Visiting Professor of Management Practice at Saïd Business School and Mirtha Kastrapeli of State Street, suggests there is still work to do on developing standard measurements and methods for analysing these ESG factors. The research finds that while investors have fewer concerns about ESG factors, surveys show they want current data to be more robust and transparent. The study finds that 92 per cent of institutional investors want companies to identify and report ESG factors that materially affect performance. Some 60 per cent of them cited a lack of industry standards for measuring ESG as a significant barrier to full integration into investment practice. Similarly, while nearly half (46 per cent) of retail investors want more companies to report on ESG performance, the same proportion say they need more data from other sources as well in order to make educated decisions.