Employee satisfaction platforms such as Glassdoor will play an increasingly important role for investors assessing the environmental and social governance (ESG) credentials at smaller firms, according to new research from MBH Corporation PLC (FRA:M8H, OTCQX:MBHCF, ETR:M8H).
The study among UK-based professional investors managing £83.2bn collectively in small and micro-cap investments showed that 89% believed the role platforms will play in providing data on governance and future company performance will increase over the next three years, with 17% expecting a dramatic increase.
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The data also found that investors believe the lack of publicly available ESG data from smaller companies means analysts are increasingly looking to employee review sites such as Glassdoor and Vault for information.
It added that not investing in small and micro-caps could be costly for ESG-focused investors, with around 89% questioned saying small and micro-caps are relatively unploughed territory despite many having strong ESG credentials.
The research also highlighted that 81% of investors believe they can have more influence on the ESG strategy of small and micro-cap companies as they will have larger shareholdings which will not be the case at mid-cap and larger companies, adding that around 86% believed a focus on boardroom diversity at smaller companies from investors will increase over the next three years, with 39% expecting a dramatic increase.
“There is a clear need for companies to be in full control of their ESG reporting and to invest in ensuring that their credentials are properly reflected. Investors are so hungry for information and will reference relevant websites for clear insights into companies,” MBH executive director and chief executive of Acacia Training Vikki Sylvester said in a statement.
“ESG is at the heart of our business strategy and we recognise how central it is to business performance and the value and responsibility we have for our people and the planet,” Sylvester added.