Switzerland’s Ethos Foundation has branded the sustainability reports of more than 140 of the country’s largest listed companies as “clearly unsatisfactory” in its first study evaluating such reports. Ethos – a Swiss foundation promoting socially responsible investment amongst pension funds – said its research highlighted a wide disparity between companies and significant gaps in sustainability reports. For the first time, listed Swiss firms of a certain size were required to submit such reports to a shareholder vote in addition to publishing them. The new requirement aimed to offer investors a better idea of how companies managed ESG concerns, with Ethos finding a “problematic” lack of transparency and insufficient data quality. Just 75 of the 143 companies that submitted their sustainability report to a shareholder vote followed a recognised reporting standard – such as the Global Reporting Initiative or the Sustainability Accounting Standards Board – which Ethos said was essential for investors to correctly assess and compare businesses’ non-financial performance. Additionally, only 61 companies had their sustainability report verified by an external auditor, with 55 of them limiting the audit only to some ESG indicators – rather than the entire report. Ethos has backed the Swiss Federal Council’s plan to tighten its requirements to bring companies into line with stricter ones mandated by the EU. This would include making the use of a reporting standard and the verification of the report by an external auditor mandatory, and extending the reporting obligation to all listed companies.
