<
https://theconversation.com/how-australian-companies-can-fudge-their-numbers-to-show-social-and-environmental-progress-212442>
"What’s the easiest way to improve a company’s social and environmental
performance? The unfortunate answer, from our analysis of Australian public
companies, is to change the way you measure it. In particular, by changing what
you said last year to make this year’s performance look better.
Reporting on environmental, social and governance (ESG) performance is
increasingly important to the fortunes of listed companies – under pressure
from investors, regulators and other stakeholders.
In some cases, executive pay is tied to these metrics.
Our study, which examined reports from the top 500 companies listed on the
Australian Securities Exchange (ASX) over the past 15 years, suggests progress
can be little more than sleight of hand, facilitated by the lack of clarity
around how ESG performance is measured and reported.
Our final data set includes those companies that report on both their ESG
performance and their executive remuneration practices. This numbered about 215
individual companies.
Of these, roughly one in six made adjustments to past reported ESG performance,
particularly around social measures such as gender diversity or workplace
safety. The average size of the adjustments was also significant, at 28% of the
original value reported.
About 55% of companies tied a proportion of their chief executive’s bonus to
ESG metrics. These companies were twice as likely to make one or more
adjustments to past reported ESG numbers. In fact, 33.5% of all adjustments
were of an ESG measure that was included in the chief executive’s bonus. The
average size of these adjustments was also larger, at 36% of the original
value.
This occurred across all industries but was most common in two areas: the
financial sector and the materials sector, which covers mining and chemical,
construction and forest products."
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
