In January, the International Organization of Securities Commission published a statement on disclosure of ESG matters by issuers providing important insight regarding the current developments regarding the disclosure of ESG information and the perspectives of different market participants including investors and issuers.
From the investor’s perspectives, they are looking for issuers to report on how ESG matters affect the issuer’s long term value creation, the nature of strategic and financial risks and the way issuer intends to manage them. On the other hand, ESG information is being increasingly disclosed by issuers either on a voluntary basis or as a result of compulsory requirements at a local level. However the type and quality of information disclosed differ in and between markets, depending on the disclosure frameworks used. However, investors are also looking for enhanced reality and comparability of ESG information in order to facilitate more accurate risks assessments and informed investment decisions.
In order to facilitate the disclosure of ESG information and enhance the comparability of such disclosures for investors, the Task Force on Climate-Related Financial Disclosures in which climate-related risk disclosure recommendations are provided. Similarly, there are other reporting frameworks including the Carbon Disclosure Project, Global Reporting Initiative and Integrated Reporting.
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