Environmental, social and corporate governance reporting : perspectives from the Johannesburg Stock Exchange and an international metals and mining sample

[摘要] ENGLISH ABSTRACT: Global interest in responsible investing has grown in recent years. To make effectivedecisions, responsible investors require listed companies to report on financial and nonfinancialperformance, giving particular attention to environmental, social and corporategovernance (ESG) considerations. This study was undertaken to address the paucity ofacademic research on ESG reporting in South Africa. A number of local studies had focusedon environmental and governance reporting, but no studies had taken a holistic view of ESGreporting. Nor had any studies focused on the metals and mining industry in particular. This isa very important industry from an economic and ESG perspective, both in South Africa andinternationally.The primary objective of this study was two-fold. Firstly, it was to investigate the extent ofESG reporting (both in South Africa and in a sample of international Metals and Miningcompanies). The second objective was to evaluate the factors that could potentially influenceESG reporting in these two samples.A positivistic research methodology was adopted as this approach allowed the researcher totest the stated research hypotheses. Quantitative secondary data were thus collected andanalysed. The data collection process consisted of three phases: the first phase involved anextensive literature review of the key constructs; the second phase dealt with the collection ofdata for the dependent variable (Overall ESG score) from MSCI ESG Research's database;and the third phase entailed collecting data for the 12 independent variables from Bureau vanDijk and selected websites.MSCI ESG Research's universe was used to establish the two samples used in this study. TheJSE sample consisted of 110 listed companies, whereas the international Metals and Miningsample consisted of 173 companies. Because MSCI ESG Research had completed only oneyear of ESG research when this study commenced, only data for 2012 were available.Descriptive and inferential statistics were completed to analyse the data.The empirical findings of the JSE sample show that the Governance pillar mean score wassignificantly higher than the Social pillar mean score and the Environmental pillar meanscore. ESG reporting was found to be positively associated with companies which wereincluded in the Nedbank Green Index. Companies included in the JSE Socially Responsible Index produced significantly better ESG reports than those excluded from the index.Significant differences were also noted in the Overall ESG score based on the nature of theindustry in which a company operated.In the international Metals and Mining sample, two statistically significant relationships werefound: larger companies had higher ESG score than smaller companies; and the greater theownership concentration in a company, the better the ESG reporting on average. Fourstatistically significant differences were observed. Companies included in the FTSE4GoodIndex Series had better ESG scores than companies excluded from the index. Companies indeveloped countries had better ESG reporting than companies in emerging markets. The thirddifference related to companies which used the Global Reporting Initiative's guidelines.These companies had higher Overall ESG scores than those which did not use the guidelines.The same applies to companies which were participants of the UN Global Compact and thosewho were not.It was concluded that investors who favour sound ESG reporting (and hence ESGmanagement) should ideally focus on larger companies, those which are included in anresponsible investing index, use the Global Reporting Initiative's guidelines, and areparticipants of the UN Global Compact. Listed companies, particularly those in the Metalsand Mining industry, should give more attention to environmental and social considerations,to the overall quality of their ESG reports, and should make more use of available initiativesto aid non-financial reporting.

[发布机构] Stellenbosch University