A study undertaken by PwC has found that 87 per cent of investors expect to consider resource scarcity and climate change as part of their investment decisions over the next three years.
The research found that 82 per cent already considered this impact on their potential investment, and that it was set to increase over the next three years.
When it comes to getting more information from the company, 89 per cent of investors are very likely to request more information from the business, and 7 per cent somewhat likely with sustainability an integral part of the information they require.
Investors are considering sustainability because 73 per cent of them see it as a way of mitigating risk and this is a primary driver. While 52 per cent see sustainability as a primary driver for enhancing performance, while another 36 per cent see it as a primary driver for cost savings through reduction of environmental impact.
However, the investment community is concerned by the information given to them from companies. A total of 82 per cent were dissatisfied with how risks and opportunities from sustainable actions are identified and quantified in financial terms.
While 79 per cent of them believe sustainability reports do not help them to compare companies in the same industry in terms of performance.
On the implications of this increasing focus on sustainability, the report said: “As companies consider how resource scarcity, extreme weather events, rising sea levels, and evolving societal expectations regarding corporate responsibility will affect their long-term business strategies, operations, and reporting, the perspectives of their owners and providers of future capital are critical.
“It’s equally important for securities regulators to understand how, when, and with what weight investors consider these issues as they determine what disclosure requirements best serve the public markets.
“And as institutional investors strive to understand the impact of these issues on corporate strategy, investment returns and portfolio risk, they can better exercise their responsibilities to those whose assets they manage.”