How do different geographic regions view E&S data providers?
IR professionals in Europe complete more E&S questionnaires than respondents in any other region, averaging 4.6 in the past year. The number of conversations they hold on environmental matters with investors (20) is above the global norm of 14, and on social matters (13) is above the global average of 10.
Respondents in Europe are also more likely than the global norm to say investors are asking for more regular discussions and showing more interest in ESG, though they also feel most strongly that investors are not focused on the details.
For IR professionals in Europe, environmental reporting focuses most on carbon reporting/emissions and greenhouse gas references: each is reported on by 18 percent of IR respondents in the region. The coverage of greenhouse gas issues in company reporting closely mirrors the number of buy-side respondents in Europe (16 percent) looking for it.
But buy-siders in Europe are far more focused on carbon emissions, with just under half (44 percent) specifically looking for coverage of this topic in company reporting. The next-most important issue is water use, looked for by one in five buy-side respondents in Europe, but reported on by only 8 percent of IR respondents in the region.
Health & safety is the social issue most reported on by IR professionals in Europe, with 24 percent of respondents citing it as a focus, followed by CSR and employee diversity, cited by 16 percent and 13 percent, respectively. This diverges widely from what buy-siders in Europe are actually looking for, however: their main focus is employment issues and labor practices, at 26 percent of responses; these are reported on by just over one in 10 IR respondents in Europe.
The next-most important issues for buy-siders in Europe are management & board diversity, employee diversity and employee turnover, each of which is cited by 21 percent of respondents. A fifth of buy-siders look for coverage of health & safety issues in social reporting in Europe.
Sustainalytics ESG Ratings and Research tops the list of most accurate E&S data providers for IR professionals in Europe, with 40 percent of respondents ranking it first. It is also most favored by buy-siders in Europe, more than six in 10 of which use it.
Second-ranked in Europe is MSCI ESG Ratings, used by 41 percent of buy-siders and seen as the most accurate E&S data provider by almost a third (32 percent) of IR respondents in Europe.
IR professionals in North America have the fewest E&S conversations with investors, and are least likely to find investors wanting more regular discussions on ESG issues. They also complete the fewest E&S questionnaires of any region – an average of 4.1, just marginally above the global norm.
IR professionals in North America focus on governance reporting more than any other region, especially at small-cap firms, where governance is the main focus of ESG reporting for 45 percent of IR respondents.
Both IR professionals and buy-siders in North America focus most on greenhouse gas references in company reporting, with almost two thirds of IR respondents and just under three in 10 buy-siders citing it. Buy-side respondents place equal importance on general references to environmental impact, however, while just one in 10 IR respondents focus on this issue.
Strikingly, the second-most important area of reporting focus for investor relations professionals in North America is energy consumption, cited by one in five respondents – but not considered important by any buy-siders in the region.
Just under a third (30 percent) of IR professionals in North America report on employee diversity, though this is considered important by less than a quarter (23 percent) of buy-siders in the region. For the buy-side community, the most important topic is management and board diversity, cited by 31 percent of respondents, followed by employee diversity and corporate governance (23 percent each). Just 2 percent of IR respondents in North America cover governance in their social reporting.
As in Europe, Sustainalytics ESG Ratings and Research (33 percent) and MSCI ESG Ratings (30 percent) top IR respondents’ list of the most accurate E&S data providers, and buy-siders in the region agree: 47 percent of them use Sustainalytics ESG Ratings and Research and a whopping 56 percent favor MSCI ESG Ratings.
IR professionals in Asia have more E&S conversations with investors than respondents from any other region, averaging 35 a year for environmental discussions and 24 for social conversations. Almost two thirds (63 percent) of these respondents feel these conversations are generally worthwhile. Respondents in Asia complete an average of 4.5 E&S questionnaires a year.
For IR professionals in Asia, the most common topic in environmental reporting is greenhouse gas references, cited by 28 percent of respondents, followed by carbon reporting/ emissions (24 percent) and environmental impact and energy consumption (20 percent each).
The responses from buy-side respondents in Asia were too low to be statistically relevant for this question.
When it comes to reporting on social issues, CSR and health & safety are the biggest areas of focus for IR professionals in Asia, with each cited by one in five respondents. Unlike their counterparts in North America, IROs in Asia are not greatly concerned with employee diversity, which is mentioned by just 4 percent of respondents.
The other main topics in social reporting in Asia are employment issues & labor practices, cited by 16 percent of IR respondents, and general employee matters (also 16 percent).
IR respondents in Asia rate MSCI ESG Ratings (38 percent) and Dow Jones Sustainability Index (17 percent) as the two most accurate providers of E&S data, but buy-siders in the region have a preference for MSCI ESG Ratings (50 percent) and Sustainalytics ESG Ratings and Research (33 percent).
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