May 25, 2021

Five ESG Disclosure Practices Valued by Investors

Rebecca Bar

The number of companies using SASB Standards to disclose sustainability information to investors has increased more than 4X since the start of 2020. As use of SASB Standards grows, best practices for SASB disclosures are emerging. To illuminate these best practices, the SASB Alliance has convened several Corporate Investor Dialogues to share investor feedback on effective approaches to the implementation of SASB Standards and ESG disclosure.

After hosting three dialogues, we began to see trends in the investor feedback on disclosure quality, format, and decision-usefulness of SASB disclosures. Here are five ESG disclosure practices those investors valued most:

  • Context: It is most useful when companies not only disclose performance data, but also explain how the business is managing the SASB topics as business opportunities or risks.
  • Focus: Separating investor-relevant content from content that is relevant to other stakeholders makes it easier for investors to find and use the information that is most useful to them.
  • Convenience: Most reports included a table of SASB metrics, but those with the data provided alongside the metric were easier to use than those that referred to a page number.
  • Reliability: When companies included a third-party assurance report, the investor participants took notice and provided praise.
  • Authenticity: Investors appreciate reports that aren’t “overly flowery or self-serving,” but rather are “matter of fact about the challenges [the company] and the industry face.”

To learn more about investor views on best practices of SASB disclosure, read our new paper titled “Exploring Disclosure Effectiveness: connecting businesses and investors on the financial impacts of sustainability.” If you’re interested in attending a live Corporate Investor Dialogue event through the SASB Alliance, click HERE.