Before starting to communicate on anything with anybody, it is wise to ask (in order):
- Step 1: With whom am I communicating?
- Step 2: What are they interested in?
- Step 3: What do I want to tell them?
- Step 4: How can I best reach them?
- Step 5: When should I do this? Who in my team should be involved?
Communicating on sustainability to investors is no different to every other communications process. Unfortunately, many companies do it in the wrong order (hence the title) thus:
- Step 5: “Our AGM is in April. So, we need to publish our CSR/Sustainability Report by then”
- Step 3: “Let’s follow some reporting guidelines and possibly do a ‘materiality’ exercise to identify what should go in this”
- Publish report
- Step 1: “Now, to whom should I send this report?”
- “Why didn’t anyone read it?” (Answer because Step 2 & 4 weren’t done properly)
I stylize somewhat to make a point and I do not want to suggest that all companies adopt this approach. At the same time, I have never encountered a single company that follows the ideal (also stylized) order above.
“Stop haranguing us. We’re busy. Only bother us if you can fix the problem, Mike”
OK – fair point. I’ll set myself the challenge – in this blogpost – of helping companies that are already halfway through the process for 2023 wrangle themselves from the order in which they are doing things into the most efficient possible order.
(The audience for this piece, therefore, is companies that have just published or are just about to publish their CSR / Susty report and want to use it communicate with investors & analysts.
"… and it’s a busy time of year for us … and we have no budget ..."
Fine. I will assess cost (which is zero) and time required (very little) as I go.
Step 1: With whom am I communicating?
- For free: This article on 58 influential investors. Do you know who they are?
- For free: WBCSD SustIRGuide: Targeting investors and analysts
- For free: Use of SRI-Connect’s Directory to search for analysts and investors interested in your sector
- Time required: Using this guidance, companies can probably make a 30+% improvement to their distribution list within a couple of hours
Step 2: What are they interested in?
- For free: We will (next week) send ‘Sustainable Investment Sector Interest Snapshots’ - Summaries of the issues that have sustainable investors and analysts have shown most interest in … on a sector-by-sector basis.
- Time required: It will take an IRO / CSR managers from companies two minutes to register with SRI-C for free and then 10 minutes to read the two page ‘snapshot’
Step 3: What do I want to tell them?
- For free: WBCSD SustIRGuide: Preparing messages and data for investors and analysts
- In summary: Focus on your ‘sustainable equity story’. Use data to evidence aspects of your story. It’s back-up not the main event.
Step 4: How best can I reach them?
- Directly – to research providers via a sustainability results webcast to which all analysts are invited
- Directly – to your largest investors via a (virtual) sustainable investment roadshow
- Directly – by enhancing your targeting (see Step 1) and integrating communications with your ‘mainstream’ investor communications.
- Indirectly – your CSR/Susty report should form the basis of what you present directly … but don’t expect investors to read and understand it proactively (especially if you haven’t distributed it for free via SRI-C’s Market Buzz)
Cost & time required: Aaargh - this list of activities sounds daunting but if you find the right support (sell-side or independent provision) a company’s workload is typically limited to:
- A couple of set-up calls
- Preparation of a 20 minute presentation
- An hour for the research providers webcast and a day for the investor roadshow
So – two days in total … to tell your sustainability story … in your terms … with context … directly to all of the investors and analysts that matter … and to engage with their interests.
Just compare this to the amount of time you spend on producing the report and gathering data and I am sure you will agree that these two days are the most efficient use of any time you devote to sustainable investor communications
Step 5: When should I do this? Who in my team should be involved?
- When should I do this? Now! Seriously, if you haven’t already started for 2023, get onto it now!
- Who should be involved? Your head of CSR/Susty and someone from your IR team
“Simple and free? Really?”
Yes … it is simple and free for companies to do all of this.
But don't let that put you off.
If we have learned anything over the past ten years, it is that the people in companies who need to do this (IROs & CSR managers) are typically time-poor and often ‘confidence-poor’. (Sustainable IR feels like something new … even though it should be just like conventional IR with a lens).
So it should be comforting to know that - for those companies that want more support than this - it can be found in the service providers listed in the Directory on www.sustainable-ir.com and from SRI-Connect (SRI-C’s products and services for companies).
(… and the good news is that this support is typically delivered by independent sustainable investment specialists working from home without giant glass and steel offices to support … so it tends to be cheap 😉)
So …
… let’s all start communicating forwards.
Always interested to hear other (esp. opposing) views on this topic: Via SRI-Connect here | Via LinkedIn here
PS: Answering my own questions in relation to this article
- STEP 1: With whom am I communicating? Senior sustainability managers and investor relations officers at companies.
- STEP 2: What are they interested in? Improving the efficiency of (and reducing the pain inherent in) their communications on sustainability with investors and analysts
- STEP 3: What do I want to tell them? That a different approach is easily within their grasp and budget and that SRI-Connect is experienced in and position to
- STEP 4: How can I best reach them? Write what I think; send it directly to people that I know and post it on LinkedIn for others
- STEP 5: When should I do this? As companies approach the date on which their CSR/Sustainability report will be published and they start to think about distribution of it. Who should do it? Me, I suppose!
