An initial study of disclosures related to responsible investing implementation

Abstract

Financial institutions (FIs) such as banks, insurance companies and pension funds have a significant impact on the environment through the financing they provide. Companies such as mining and oil and gas companies receive funding and use this for different projects, some of which have severe environmental and social consequences. This study examined the extent to which both the grantor of finance and the receiver of finance identify and apply responsible investment (RI) practices when making investment decisions. RI disclosure in the integrated reports of companies was examined to assist with the research. The study also examines if there is a relationship between companies listed on the FTSE/JSE RI index and the FTSE/JSE RI Top 30 index and the extent of their RI disclosure. The results of this research indicate that the extent of RI disclosure in FIs in South Africa is limited. The research further found that the extent of RI disclosure for the mining and oil and gas companies was stronger than for FI’s. Finally, the research found that there appears to be a correlation between companies listed on the indices and their RI disclosure. This was noted as companies on the indices have stronger RI disclosures than companies not on the index