New research on the value of 'extra-financial' disclosure to investors and analysts
Aug 06, 2012
A new research report has been issued exploring how investors and analysts source, use and are influenced by so-called 'extra-financial information', which includes Environmental, Social and Governance (ESG) information and other non-financial information. The report shows that for the majority of investors and analysts surveyed, extra-financial information is very relevant or relevant to investment decision‑making or analysis.
The report, entitled The value of extra-financial disclosure - What investors and analysts said is the result of a survey commissioned by the Global Reporting Initiative (GRI) and The Prince’s Accounting for Sustainability Project (A4S), and conducted by Radley Yeldar. The survey involved a relatively small sample of investors and analysts but is considered "a useful snapshot of investor and analyst sentiment towards extra-financial disclosure at the present time".
Some of the findings from the survey included:
- Over 80% of the research sample believe that extra-financial information is very relevant or relevant to their investment decision‑making or analysis
- Investors and analysts use multiple sources to gather relevant financial and extra-financial information but show a strong preference for sources which are more comprehensive and specialised - with direct engagement with Board level representatives, followed by formal reporting channels such as the sustainability report, annual report or integrated report are most influential
- Over 80% of investors and analysts surveyed believe that integrated reporting will deliver benefits to their analysis and company assessments - seeing integrated reporting as useful or very useful for increasing the reliability, accessibility, relevance and comparability of extra-financial information, as well as improving assessments of future company performance
- A majority of respondents were not familiar with eXtensible Business Reporting Language (XBRL), with less than 10% of those surveyed indicating they use XBRL and that it affects how they receive financial information.
Click for more information (link to GRI website).