12.1.2 Problem statement: investors' lack of information re links between companies and BES

In order to project a return on investment, an investor needs to assess the business risks and opportunities of the 'investment target'. Investors require information concerning the individual company as well as predictions for the industry as a whole. As regards listed companies, financial performance information may be purchased from credit rating agencies such as Moody's and Standard & Poor's. Non-financial information, related to the ESG performance of a company can be obtained from sustainability rating agencies such as Innovest-Riskmetrics, EIRIS and Vigeo (hereinafter: ESG Agencies).

Research carried out by the Center for Sustainability at Nyenrode Business Universiteit (Nyenrode CfS) and the International Union for the Conservation of Nature - Netherlands Committee (IUCN-NL) in 20071 revealed that institutional investors saw room for improvement in the quality and quantity of information on BES provided by ESG Agencies. In particular, several pension funds indicated that they would be interested in such information. They also suggested that the products offered to institutional investors by ESG Agencies should include more detailed information on biodiversity. At the same time, initial talks with ESG Agencies indicated that these agencies were waiting for a clear demand from investors for such information. Consequently, this situation could be considered as a typical example of market failure, since demand and supply did not match. In the 'real world' many markets are imperfect. Factors such as a lack of perfect and full information for all actors, divergent regulation in the various jurisdictions where the actors are operating, or the fact that certain costs are not included in transactions and are passed on to society as a whole, obstruct the coming into existence of a proper market.