Investors are expressing concerns about greenwashing and unsupported claims in sustainability reporting, according to a survey conducted by PwC. The survey, which interviewed 345 investors and analysts, found that 94% of respondents believe that corporate reporting on sustainability performance contains unsupported claims. This is an increase from the previous year’s figure of 87%. The survey also revealed that 79% of investors think that unsupported claims are present to a moderate or greater extent.
Investors are looking for greater clarity and consistency in sustainability reporting, with 57% saying that they support these efforts. They are also seeking stronger reporting standards, as 85% of respondents say that they would have confidence in sustainability reporting if it had reasonable assurance, similar to an audit of financial statements.
The survey also highlighted investors’ growing focus on technological transformation, with 59% identifying technological change as the most likely factor to influence how companies create value over the next three years. Specifically, 61% of respondents believe that the faster adoption of artificial intelligence (AI) is very or extremely important. However, investors are also mindful of the risks associated with AI, including data security and privacy, insufficient governance and controls, misinformation, and bias and discrimination.
Sustainability remains a significant factor for investors, with 75% stating that a company’s management of sustainability-related risks and opportunities is an important consideration in their investment decisions. However, this figure is down 4% from the previous year.
Overall, the survey suggests that investors are increasingly focused on the reliability and transparency of sustainability reporting. They are looking to regulators and standard setters to create clarity and consistency in companies’ reporting practices to address concerns of greenwashing. Furthermore, investors are recognizing the importance of technological change, particularly the adoption of AI, in driving value creation, while also being aware of the associated risks.
The survey highlights the need for corporate reporting to evolve and provide reliable and comparable information that investors and other stakeholders can rely on. As sustainability and technological transformation continue to shape the investment landscape, companies will need to address these factors in their strategies and risk assessments to meet the expectations of investors.