A report out earlier this month ranking the world’s stock exchanges on sustainability disclosure concluded that the world’s largest companies are under-reporting sustainability policies and performance, hampering investors’ access to data that will allow them to play a full role in the transition to a low-carbon economy.

It was swiftly followed by a call by the United Nations-organized Sustainable Stock Exchanges (SSE) Initiative Investor Working Group – which represents $7 trillion in assets under management (AUM) - for global exchanges as well as the International Organization Of Securities Commissions (IOSCO) to take a stronger role in improving disclosure around environmental, social and governance (ESG) data. 

In Corporate Knight’s report, ranking the world’s stock exchanges on sustainability disclosure for the fifth time, Euronext Amsterdam was the world’s best performing exchange when it came to disclosure of sustainability metrics. Over 50 percent of its large listings disclosed all four environmental metrics – greenhouse gas (GHG) emissions, energy, water and waste. Stock exchanges in European developed countries dominated the top 10 rankings, with the exception of the Australian Securities Exchange and the Johannesburg Stock Exchange.

The London Stock Exchange, which placed eighth in the ranking, saw 95 percent of its large companies disclose GHG emissions. This makes it the home of the largest proportion of companies disclosing GHG emissions among large stock exchanges (more than 100 companies with a market capitalization of at least $2 billion). The U.K.’s 2013 update of the Companies Act Made GHG emission disclosure mandatory for listed U.K. incorporated companies. 

But while disclosure rates have improved over the past five years, the report shows the overall level of ESG disclosure to be low. Out of 4469 large companies analyzed, only 47 percent disclosed GHG emissions, “arguably the most closely tracked sustainability indicator,” it said.

Furthermore, over the 2010-2014 period, the number of large companies that disclosed GHG emissions nudged up just 12 points from 33 percent to 47 percent despite a number of high-profile policy initiatives aimed at sustainability disclosure in the last few years.

Steve Waygood, Chief Responsible Investment Officer at Aviva Investors, a global asset management business wholly owned by Aviva plc (LON:AV), the insurer, is the Chair and founder of the SSE Initiative. To coincide with the publication of this report, he is writing to the 45 exchanges and IOSCO board members, encouraging them to adopt mandatory reporting requirements for the disclosure of material ESG information.

The Corporate Knights report was first commissioned by Aviva plc in 2012 as part of the SSE Initiative. Overall, it tracks corporate disclosure on seven sustainability indicators – payroll, GHG emissions, energy, water, waste, injury rate and employee turnover.

 “We go further than ever in this fifth annual report by looking beyond disclosure and into performance analysis. For each exchange, we assess carbon intensity, fossil fuel reserve intensity and the percentage of listed companies whose businesses involve environmentally-friendly activities, technologies and services versus high-carbon emission activities. This is a significant step forward that will empower investors to increase the integration of sustainability factors into investment decision making,” said Mr. Waygood.

“I urge stock exchanges and regulators to establish a mandatory requirement for the disclosure of ESG information, introduced on a “comply or explain” basis. This will help establish and maintain clear expectations, while allowing companies the flexibility they need,” said Mark Wilson, Group Chief Executive Officer at Aviva.

He also called for IOSCO, which sets standards for the securities sector as a whole, “to develop globally consistent listing rules.”

Toby Heaps, CEO of Corporate Knights, said, “The task for the next five years is to take a lesson from the old joke about the drunk who lost his keys:

A policeman questions a drunk man searching for something under a street light. The drunk says he has lost his keys, and the policeman joins in the search. After searching for a few minutes, the policeman asks whether the drunk is sure he lost them here, and the drunk replies no, that he lost them in the park. The policeman asks why he is searching here, and the drunk replies, ‘This is where the light is.’”

“Therein lies our challenge,” he said. “Investors and insurers decide how to allocate capital and price premiums based only on available information. But right now, much of the information necessary to assess critical mega-risks, such as the transition and litigation risks posed by climate change, remains in the dark. Accounting standards-setting bodies are in a unique position to install street lamps around these risk-relevant factors.”

“Only with the right information can investors and insurers fulfill their critical role as we transition to a sustainable economy. Let’s make sure their path is well lit,” said Mr. Heaps.

Dina Medland is an independent writer, editor and commentator with a strong focus on issues around corporate governance, ethics, the workings of the boardroom and sustainable business. She is on the team of contributors to @ForbesEurope and is an ex-Financial Times staff member who has been a regular contributor in recent years. Further details about her background and a portfolio of work – including her commercially sponsored blog ‘Board Talk’ are available on her website http://www.dinamedland.com