Investors need trustworthy financial data to make good decisions
Most financial data typically focuses on lagging indicators (i.e. metrics like current operating expenses, employee turnover, capital expenses, net income, sales figures, etc.). While these data points give investors insight about where a company has been, they don’t provide much guidance for where it’s heading in the future. As the saying goes “past performance is not a guarantee of future performance”.
Investors benefit from trustworthy sustainability data to inform decisions
Sustainability data directly (and indirectly) addresses the company's long-term risks and opportunities related to environmental factors. These factors can significantly impact a company's future profitability and reputation. Understanding a company’s sustainable initiatives helps investors understand the company’s commitment to risk management around climate impacts, resource depletion, regulatory changes, and working to avoid reputational harm from accusations of greenwashing. Sustainability data also provides an insight into how the company is addressing market expansion and innovating new products for consumers providing a clue to future growth potential.
Current sustainability reporting isn’t helping investors get the data they want and need
Many companies currently produce sustainability reports where the quality and trustworthiness of the sustainability data is not on the same level as the quality of their financial data in their fiscal reports. Some sustainability reports are only glossy marketing documents designed to make shareholders feel good instead being of data filled documents providing insight and crucial decision-making information to investors and consumers about the future health of the company. Here’s a simple thought experiment – when was the last time you saw a company’s fiscal report that showed sales and earnings were down? By contrast, when was the last time you read a sustainability report that showed the company was producing more emissions and not on track to meet its sustainability goals?
Capital markets can help investors make better decisions and life better for companies
The marketplace is the answer: investors can have a voice. Investors can incentivize good governance around sustainability initiatives. Good governance in turn promotes transparency, accountability, measurement, and reporting of a company’s sustainability initiatives that are material to its operations. Robust reporting has two major benefits: first, reducing the likelihood of accusations (and occurrence) of greenwashing and greenhushing; and second, getting investors the information they need to better understand which companies are positioning themselves for success and long-term value creation.
GIX was founded by experienced Wall Street executives with decades of experience in capital markets and a shared passion for supporting investor protectionism and helping companies maximizing long-term value creation.
