Investor preferences reflected in sustainability reporting A study assessing the informational quality of sustainability reports with respect to investor preferences Bachelor's

Abstract: The interest for investing in sustainable assets has grown rapidly over the recent years. Many investors use methods for risk assessment based on for example Environmental, Social and Governance (ESG), Corporate Sustainability (CS), Environmental Risk assessment (ERA) and Socially Responsible Investments (SRI). It is also common that investors use sustainability reports to gather information. Often when companies do have information on their sustainability practises they tend to overload the reader by reporting all their activities without any real value for the stakeholder. Rather than providing valuable information, the report confuses the stakeholder with a quantity of irrelevant facts. The main purpose of this paper is to investigate what information professional investors and analysts prefer to see in sustainability reports and to what extent the prefered information matches the information provided by sustainable firms based in Sweden, producing products and/or services based on some sort of renewability. This report is based on a multi-method approach which includes qualitative interviews and the Consolidated Narrative Interrogation model (CONI). A selection of theories namely, Socially Responsible Investments (SRI), Legitimacy theory, Stakeholder theory, Screening, Green-washing and Defining sustainability are used to explain the context of the subject of investigation. As for the qualitative part of the study, eight themes were identified and translated into content categories. A conclusion that has been drawn from the qualitative part of the study is that the informational preferences are well reflected in recognised frameworks such as ESG, GRI and the UNs SDGs. Furthermore, it is of great interest to investors and analysts to receive detailed, numerical and measurable information regarding all content categories. The authors have concluded that the preferences regarding informational quality are not reflected in the reports as the contextual scores were assessed as mediocre at best. The authors have also drawn the conclusion that companies have to improve the informational quality of the reports and provide a larger amount of numerical figures that are measurable over time.