Investors demand improved sustainability reporting

Mon Feb 21, 2011 10:01am EST

* Stock exchanges should force greater disclosure-investors

LONDON Feb 21 (Reuters) - Institutional investors managing more than $1.6 trillion in assets want the world's 30 largest stock exchanges to shake up listing rules to force companies to improve their sustainability reporting.

The 24 shareholders said they want it to be easier to judge the environmental, social and governance risks (ESG) of the firms they invest in.

A large number of companies listed on Euronext Paris, Tokyo Stock Exchange, Helsinki, Euronext Amsterdam, Euronext Lisbon and Borsa Italiana were disclosing good levels of ESG data, the investors said in an open letter.

Exchanges with the least number of companies disclosing this data included Australian Stock Exchange, NASDAQ GS, Korea Exchange, Santiago Stock Exchange and Philippine Stock Exchange.

"A lack of information as a result of limited or non-disclosure of ESG data makes it difficult for long-term investors such as us to assess the wider ESG risks and opportunities associated with a company," said Paul Abberley, chief executive of Aviva Investors London and one of the most vocal supporters of the initiative.

"We believe that stock exchanges can play a crucial role in helping to create more sustainable global capital markets because of their ability to directly influence and monitor... companies seeking to access the equity markets," he said.

Allianz Global Investors Investments Europe, the Australian Council of Super Investors, Dexia Asset Management, The Co-operative Asset Management and Trillium Asset Management were among the signatories to the letter.

(Reporting by Sinead Cruise, editing by David Cowell)