Responsible Investment

ESG Viewpoint – ESG disclosure at mid-cap companies

We engaged with 20 mid-cap companies on how to improve the quality of their ESG disclosure.
July 2019

Catherine McCabe

Analyst, Responsible Investment

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Risk Disclaimer

The value of investments and any income derived from them can go down as well as up as a result of market or currency movements and investors may not get back the original amount invested.

Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

In recent years, disclosure frameworks established by governments, international listing agencies and non-profit organisations have paved the way towards reporting on ESG issues being the norm rather than the exception. Companies which are laggards from a reporting perspective are arguably at a competitive disadvantage, and we are keenly aware that mid-cap companies may lack the necessary resources to deliver the quality of reporting that stakeholders have come to expect.

As an investor, we see ourselves able to play a role in assisting these companies to improve the quality of their reporting by flagging critical gaps and helping them to close them, based on our experience of engaging their larger peers. After extensive analysis, we shortlisted 43 companies with disclosure gaps belonging to three relatively high-risk sectors: consumer stables, industrials, and materials. Of these 43 companies, 20 were willing to engage in dialogue. With few other investors engaging them on ESG disclosure, we found that they were receptive to our advice.

Risk Disclaimer

The value of investments and any income derived from them can go down as well as up as a result of market or currency movements and investors may not get back the original amount invested.

Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

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