Why IROs are responding to the changing ESG landscape
Sean Kensil, Annaly Agency Group
ESG roadshows have long been recognized as an excellent idea but, in practice, a number of trends had to converge before this new type of investor outreach caught on.
For many firms, it took attaining enough sophistication in the ESG reporting journey to justify blocking off several days of management time to highlight the firm’s ESG progress to an investor audience.
IROs embark upon ESG roadshows for numerous reasons, but the rapidly growing pool of ESG capital is often among the most compelling. ‘ESG investors are increasingly a large share of the investor universe,’ says Sean Kensil, director of IR for Annaly Capital Management, based in New York City. ‘From an investment standpoint, there’s a large, untapped opportunity for most companies when you think about the wide range of ESG strategies and prospective capital out there.’
The numbers are impressive. Using a broad definition of ESG, the entire value of global assets invested according to some form of sustainable or socially responsible criteria is set to skyrocket by nearly 50 percent in the next three years, from $35 tn in early 2022 to $50 tn by 2025, according to data from Bloomberg Intelligence.
For IR professionals, the growth in ESG investments is fundamentally changing their job descriptions. According to Nasdaq’s most recent Global IR Pulse Survey, heading into 2022 nearly one in five IR professionals served in a lead ESG role – with almost 40 percent of IR professionals having an ESG-focused remit.
