Open letter regarding corporate sustainability reporting
21 Jun 2012
As heads of state gather for the Rio+20 meeting it is important to focus on practical and meaningful action that will benefit us all.
Investors have a vital role to play in ensuring a sustainable future for our world. But how can we make informed investment choices if basic information on sustainability is lacking?
That’s why we’ve formed a group to call for a significant change in corporate reporting which we believe will have a positive impact on the sustainability of the planet and ensure the quality of life for our children and future generations.
At the moment 75% of companies* do not report on sustainability issues, limiting the ability of markets to integrate sustainability into company valuation.
We are asking participants at Rio+20 to commit to developing a UN agreement on sustainability reporting so that we, as investors, can help guide the world towards a sustainable future.
This UN agreement would be a commitment by member states to develop regulations, codes or listing rules to encourage the integration of sustainability issues within the annual reports of all listed and large private companies, and would be a step towards integrated reporting.
Corporate sustainability disclosure would be on a “report or explain” basis. We recognise the need for flexibility so an opt-out for companies that choose not to prepare a sustainability report could exist. However, these companies would be required to explain their reasons to their stakeholders.
Without this agreement it could be years before sustainability reporting is common practice across global markets. An international convention would level the playing field and engage more companies on the path to business sustainability.
The scale of support among investors for this idea is extraordinary. Managers representing US$2 trillion of people’s savings have come together to ask for this convention. They are backed by investor groups representing more than US$50 trillion of assets.
We believe that disclosure is in all companies’ interests. Reporting is one of the most important catalysts for changes that contribute to the long-term health of a business. The world now needs to move from the pioneering approach of a minority of companies to a global benchmark of best practice for all companies.
We call on governments internationally to support our proposals which, if adopted, could be one of the most significant and practical outcomes of the Rio+20 Summit.
John McFarlane, executive deputy chairman, Aviva
Lead coalition signatory: Paul Abberley, chief executive, Aviva Investors
Dr Melsa Ararat, Director, ILLAC Ltd
Jyoti Banerjee, Partner, Fronesys
Tim Bolton Carter, Regional Director, Rathbone Brothers plc
Helen Brand, Chief Executive, ACCA (the Association of Chartered Certified Accountants)
Kris Douma, Head of Responsible Investment & Governance, MN (Netherlands)
Steven A Falci – Head of Strategy Development - Sustainable Investment, Kleinwort Benson Investors
Julie Fox Gorte, PhD, Senior Vice President for Sustainable Investing , PaxWorld Management LLC
Jeremy Goodman, CEO, CA Cheuvreux
Toby A A Heaps, CEO, Corporate Knights Inc
Patrick d'Humieres, CEP of Institut Rse management - ecovalue
Adam Kanzer, Managing Director & General Counsel, Domini Social Investments LLC
Mariko Kawaguchi, Chief Executive & Secretary General of SIF Japan
Steve Kelly, Managing Director, Extel
Mervyn King, Chairman, International Integrated Reporting Council (IIRC)
Jonas Kron, Vice President, Trillium Asset Management, LLC
Barbara Krumsiek and Richard Burrett, Co-Chairs of UNEP Finance Initiative
Ernst Ligteringen, Chief Executive, Global Reporting Initiative (GRI)
Peter Madden, chief executive, Forum for the Future
Professor Michael Mainelli, Executive Chairman, Z/Yen Group
Mark Makepeace, Chief Executive, FTSE Group
Jacob Nordby Christensen, RI Director, Sparinvest Holdings SE
Saker Nusseibeh, CEO of Hermes Fund Managers
Melih Önder, Chairman, Logos Portföy Yönetimi AŞ (Logos Asset Management)
Howard Pearce, Head of Pension Fund Management, Environment Agency Active Pension Fund
David Pitt-Watson - Chair, Investment Commission, UNEPFI
Michael Quicke, Chief Executive, CCLA Investment Management Ltd
Andrew Raingold, Executive Director, Aldersgate Group
Paul Scott, managing director, CorporateRegister.com
Paul Simpson, Chief Executive Officer of the Carbon Disclosure Project
Anders Thorendal, treasurer and chief investment officer, Church of Sweden
Peter Veldman, COO, Cyrte investments
Peter Webster, Executive Director, EIRIS Global Research
* Bloomberg research into 20,000 companies