There is a groundswell of interest in metrics that go beyond our traditional financial view of companies. Many organizations have done extensive work on frameworks for ESG metrics, non-financial metrics, or integrated reporting, each targeted at a range of stakeholders including customers, employees, policymakers and investors. The challenge we often hear is that companies work hard to present thoughtful sustainability reports – which investors then ignore.
So, what data can companies share that is both reflective of their businesses and useful for investors to make long-term investment decisions? While the industry and regulators come together around the most appropriate frameworks, we believe we can advance the conversation with metrics that meet the following criteria:
Quantitative: Not frameworks, ratings or judgments, but raw numbers that investors can incorporate into their own decision-making processes
Investor decision-relevant: Material to long-term investors
Consistent: Uniformly defined and consistently calculated
Widely applicable: pertinent across countries, sectors and contexts
Assurable: Auditor assurance is necessary over time to build credibility and reliance on new metrics.