Some thoughts ... yeah ... whatever
Yesterday, I was on a panel.
I said some things.
The things I said are not the point.
The point is here: Better the pain you know? ... in ESG communications.
But I needed somewhere to reference the things that I said about company <=> investor communications on sustainability without making the other blogpost too long - especially as there are a few things below that I didn't say but would have done if we hadn't run out of time in a very engaging session.
So, here they are - largely responses to the question: What should companies consider when communicating on sustainability to investors?
[1] Use www.sustainable-ir.com
It is a grant-funded, free-to-air resource designed to answer any question a company may have on this topic.
[2] Investors are not homogenous - so the sustainability information that they need will not be homogenous
(Then there are investors (of any of the types above) pursuing an 'engagement strategy'. Where these investors are genuinely engaged, they will want the same as active investors. Where they are trying to take shortcuts they might ask for the same as passive or quants investors).
[3] Investors often don't know what they are doing in this space
Companies often fall into the trap of assuming that investors know what they are doing in ESG/SRI. Many of them simply don't. They are working it out as they go along. I've been doing this for 20 years and I am still very much working it out as I go along.
But nobody should be ashamed of that. The essence of being an analyst (investment or otherwise) is not about knowing stuff; it's about being comfortable with the fact that you don't know lots of stuff and enjoying the process of finding out.
In this ESG/SRI space, we don't know lots of stuff ... but we're learning (www.sita-training.com). So, work with us.
Companies should therefore challenge investor requests (especially when those don't align with the sustainability priorities that they perceive for their own business) thus: Please explain to me how this piece of information will help you make an investment decision within the context of the investment strategy that you run.
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[4] Start with the investors not with the ESG research providers
Every discussion about ESG starts with a moan about ratings.
Ratings serve a purpose. They have strengths and weaknesses. Some investors use them a lot. Some investors use them a bit. Some investors don't use them. Move on!
(In passing, move on is what the EC and other regulators should do on this topic ... but they won't and we'll all get sucked into this wholly ill-conceived and mis-directed piece of thinking ... and one that is more likely to do harm than benefit to the EU / US's wider sustainability ambitions. Ho hum!).
The important question is: What do investors need? Research providers are the suppliers to not the masters of asset managers. Find out what your current investors and potential future investors want and which data, ratings and research providers they use before spending a minute of your time with those providers.
[5] What do investors want in capital markets days / roadshows?
Four things:
… and they need you to do the logistics around any meeting and to be concise.?While I would like to be able to spend three days a year with every company I invest in, that is not realistic. Three hours is probably all of the time, I am going to be able to spend with each company. The more work you (as a company do), the more time I can spend (as an investor) understanding your business.
[6] What would you like to see more of / less of?
More of:
Less of:
[7] How can an individual company get started?
[8] Anything else?
Yes - the most important thing of all. Be confident.
Advisor | Stewardship | Governance | Stakeholder Engagement | Strategic Comms | Best Practice | ESG | Sustainability
2 年Super article on what companies should think about when communicating about sustainability with investors. Thanks Mike Tyrrell !
SRI investor & analyst relations at SRI-CONNECT
2 年One of the things that struck me from my session with the WBCSD – World Business Council for Sustainable Development was how much of this companies (or at least the sophistiated ones on the panel with me: Andreas Kusche Jennifer Motles Eliza MAHDAVY-TURCAT) already know. The more we can say it out loud, the more confidence it will build in other companies. Many thanks Luke Blower and Juliet Taylor for the opportunity to participate and LinkedIn for the opportunity to share the thoughts more widely