A new Insider Dealing Order has come into force with effect from 15 June 2023 and brief details of this are included in this Bulletin.
Finally, the Quoted Companies Alliance has produced a report looking at investors’ attitudes on Environmental, Social and Governance reporting in small and mid-cap companies.
QCA Report – Asking the Earth? Investor Attitudes to ESG
Read More: ESG Investor Report_May2023.indd (theqca.com).
The report looks at ESG from the perspective of professional investors and also examines their expectations on ESG reporting in the small and mid-cap markets.
The findings of the report include the following:
- Expectations around ESG disclosure and management within small and mid-caps continue to grow. Compared to three years ago, nine in ten investors believe there has been an increase in expectations.
- Expectations are set to increase over the next few years, with three-quarters anticipating that ESG expectations of smaller companies will continue to grow.
- Two in five investors believe that smaller companies are missing out on ESG-related investment, and a third say that the greater level of ESG-related reporting requirements means they are more likely to invest in Main Market companies over other small and mid-caps traded on AIM.
- Over two-thirds of investors say that companies should look to provide a tailored sustainability strategy alongside their focus on each pillar of ESG.
- The biggest challenge for investors in assessing the ESG credentials of small and mid-caps is the inability to compare data between companies and incomplete data.
The report also includes several key questions which companies should consider about ESG matters, with the following being a sample:
- Do you engage with your investors to understand how they are integrating ESG into their investment decisions and what their preferences are? How could you help their decision-making?
- Do you have the necessary organisational structure to ensure that your ESG communication is effective? Is the team or individual responsible for ESG reporting integrated with the company’s strategy development?
- Have you identified your ESG-related risks and opportunities, and are these embedded into your strategy and value creation story?
- Have you considered using third-party service providers to help you collect and manage your ESG data? Do you currently have gaps in expertise that are hindering your performance concerning ESG? Is it possible to secure additional expertise to help improve the quality of your disclosures and practices?