Taking stock

The Oslo Stock Exchange, which finished 7th overall. Photo by Erik Storm.

The Helsinki Stock Exchange took the top spot in this year’s “Measuring Sustainability Disclosure: Ranking the World’s Stock Exchanges” report by Corporate Knights Capital, released on Tuesday in Geneva. Euronext Amsterdam took the second spot, followed by the Johannesburg Stock Exchange (see the ranking below.) The full report can be accessed here.

Now in its third year, the study analyzes the extent to which global stock exchanges encourage listed companies to disclose basic corporate responsibility data. The seven indicators, classified as first-generation metrics, include waste, water consumption, employee turnover, energy, greenhouse gas emissions, injury rate and payroll.

The dearth of companies that disclose each of these data points was notable: Only 128 (2.8 per cent) of the world’s 4,609 largest listed companies reported on all seven. This number remains low due to the slowing of corporate disclosure rates over the past few years. For example, the number of companies that disclosed their energy use increased by 88 per cent from 2008 to 2011, but only by 5 per cent from 2011 to 2012.

Corporate Knights CEO Toby Heaps says this report serves as an indictment of lax sustainability reporting guidelines around the world, with a few notable exceptions. “The lack of corporate reporting on first generation indices is in stark contrast to the increasing demand for them from investors, community groups and NGOs, as well as the broader trend toward increased corporate transparency and accountability.”

The report concludes with a number of recommendations for policy-makers, one of which is to require companies to tie a portion of their senior executives’ variable remuneration to the company’s sustainability disclosure practices.

Another area of concern is the amount of time between companies’ financial and sustainability reporting cycles, as there is often a considerable lag time between the two. Closing this gap would significantly enhance the value of corporate sustainability information and performance data, while sending a signal to investors that sustainability and financial data hold equal importance.

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