A group of ASX-listed companies have started measuring their environmental, social and governance (ESG) worth to report alongside their financial numbers.
Reporting ESG performance had always been an inexact science, unlike well-established accounting standards.
But the World Economic Forum in September published a set of metrics that corporates can use to evaluate their ESG chops.
Using this framework, 6 Australian-listed companies announced Wednesday that they would start reporting ESG metrics in their quarterly reports required by the ASX:
- Euro Manganese Inc (ASX: EMN)
- Vulcan Energy Resources Ltd (ASX: VUL)
- Elixir Energy Ltd (ASX: EXR)
- Minbos Resources Ltd (ASX: MNB)
- MyFiziq Ltd (ASX: MYQ)
- WhiteHawk Ltd (ASX: WHK)
Melbourne tech firm Socialsuite is providing the software for these companies to report their non-financial metrics.
Vulcan Energy is a mining company with a $259 million market capitalisation that's developed a method to produce lithium with minimal carbon emissions.
Managing director Francis Wedin said his business was proud to be one of the first adopters of the new standard ESG metrics.
"Positive impact and ESG is the core reason we started the company," he said.
"We know that by delivering against ESG we can create long term sustainable value, while driving positive outcomes for the business, the economy, society, and the planet."
Image source: Getty Images
Most investors care about ESG now
Unfortunately for those trailblazing companies, 20% of Australian investors would take higher returns over their own moral code.
But this also means 80% of local investors care about how the companies they buy into align with their personal beliefs.
The rise of ESG as a factor in investment choices was prominently on display last year after Rio Tinto Limited (ASX: RIO) blew up the historically significant Juukan Gorge.
The multinational mining giant initially defended its actions, saying its actions complied with the law.
An internal investigation later stripped $7.2 million of bonuses off 3 executives, but this only caused more public outrage for putting a 'valuation' on the priceless site.
But sustained pressure from major shareholders, including some of Australia's biggest superannuation funds, sent the 3 executives packing – albeit with massive enough golden handshakes that would mean they never had to work again.
"Investors have stepped up in this instance and demonstrated that they will not accept corporate misinformation and the absolute disrespect to cultural sites that has become Rio's modus operandi," Australasian Centre for Corporate Responsibility legal counsel James Fitzgerald told The Motley Fool at the time.
"Shareholder democracy and investor action is alive and well in Australia."
The spectacular 700% rise in the share price of Tesla Inc (NASDAQ: TSLA) last year was also a case in point. Many retail investors were thrilled with backing a company they considered a part of the solution, rather than the carbon-emitting establishment.
