ACSI’s annual research tracking the effectiveness of FY21 ESG reporting across the ASX200 was released in June.

The FY21 analysis provides greater depth to the assessment which previously assigned each ASX 200 company one of 3 ratings (essentially: none, basic and detailed) to now include 5 (no reporting, basic, moderate, detailed, and comprehensive). ACSI have for the first time also disclosed individual company ratings in its report.

In terms of sectors, utilities are the most comprehensive. At the other end of the scale consumer discretionary is more mixed, generally of a poor standard.

The report identifies the extent to which a company reports on its material ESG risks (governance, management practices, performance data and target-setting).  It does not rate the management or performance in response to those risks though that would be the cornerstone of the individual company engagement (see the updated ACSI governance guidelines HERE ).

Increasingly ESG performance is incorporated in executive incentives and mechanisms. Their use can be found HERE.  Global ESG remuneration trends can also be found HERE.

ACSI have identified a high correlation between ESG reporting and ESG performance.  So If your company is not one of 141 rated ‘Detailed’ or ‘Comprehensive’ there is a strong chance that you are falling behind in either understanding or articulating your EGS risks to investors. ACSI have been proactive in advising companies of their ratings given its members have not much choice but to hold on to these ASX 200 securities.

ACSI’s annual research tracking the effectiveness of FY21 ESG reporting across the ASX200 can be found HERE.

 

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