The number of smaller companies issuing economic, social, and governance (ESG) and sustainability reports is expected to grow in the coming years, according to its research by MBH Corporation PLC (OTCQX:MBHCF, ETR:M8H).
A new study commisioned by the investment holding company found 58% of investors surveyed believe smaller companies will increase their ESG reporting over the next three years, with 29% predicting a dramatic increase over the same time.
Pressure from the government and consumers for companies to be more transparent in their sustainability reporting following COP26 is driving the change, said the survey respondents.
Lack of ESG transparency meant smaller companies were overlooked by investors with an ESG mandate with almost 76% of investors saying the pressure to improve ESG standards comes from potential new shareholders
“A key area for demonstrating ESG credentials is the growing number of awards and accreditation schemes – 56% of investors believe awards are important for potential shareholders when assessing a new company while 72% believe they will become more important over the next three years.”
Callum Laing, chief executive officer of MBH Corporation PLC (OTCQX:MBHCF, ETR:M8H) said, “Increased ESG and sustainability reporting is a key first step to making smaller firms more visible and companies who have a strong story to tell can only benefit just as they will if they take an active approach to awards and accreditation schemes.”