Question

With fund managers and companies hiding their sustainability information, what impacts do that bring to the market?

Answer 1

The financial and operational performance of certain big and small companies are very fluctuative. They are not able to sustain their operating profit in the long run. Thus these companies try to conceal information relating to their true sustainability. This adversely impact the economic market. Due to false information, many investors invest their funds in these companies rather than a potential growth company. Also banks and other financial institutions grant funds to these companies on the basis of their sustainability. And all these funds are put to danger as they will be an uncertainty about the return after a certain span of time. Due to these, many other companies will also get encouraged to hide sustainability information in order to attract investors, vendors, banks, etc. Even the security market gets impacted as their financial instruments like bonds are rated high on such basis. Thus such an activity impacts the whole market in a negative way and impact its overall growth.