Benefits for Issuers
For companies, demonstrating corporate responsibility has never been more important. As ESG investing becomes ever more prevalent, companies concerned about the value of their brand are how they are perceived by their customers and investors will need to become more transparent in matters of sustainability.
In many international jurisdictions, non-financial reporting is now mandated by regulators. Although not currently the case in Qatar, new regulations will be introduced in due course, mandating that all listed companies provide sustainability reports, based on QSE guidance.
Companies should be aware that there are benefits that accrue when they adopt an effective sustainability strategy, including:
- Improved performance There is now considerable empirical evidence that supports the view that ESG screened investments outperform, particularly during periods of market stress
- Improved financial indicators Evidence from MSCI™ suggests that companies with high ESG scores have a lower cost of capital and less volatile earnings than those with low or zero ESG scores
- Improved investability investors are more inclined to invest in companies with high ESG scores and a positive approach to sustainability
- Preparedness. Companies adopting sustainability strategies now will be better prepared when regulator mandated reporting is implemented