Consider your timing, players, audience and itinerary
ESG roadshows defy easy definition. While financials take center stage at most IR roadshows, other topics have been deemed so important they have merited dedicated events.
Governance roadshows, for instance, have been a staple of investor activity for decades, although those efforts are typically led by an issuer’s corporate secretary, not by the chief sustainability officer or the IR team.
The rationale behind an ESG roadshow is slightly different: investors have an opportunity to drill down on the environmental, social and governance aspects of a company’s story that are both material and can prove critical for long-term success. The challenge for public companies is to cover within a brief conversation a vast spectrum of topics from emissions to gender and racial diversity, ESG frameworks and rating systems, executive compensation and other thorny governance topics. So when putting together an ESG roadshow, here are a few practical considerations.
Michael Bennett, Schnitzer Steel
Timing Some companies arrange ESG roadshows on the heels of a traditional IR roadshow. Others organize ESG roadshows after a sustainability report has been released or whenever the calendars of key executives permit.
When reserving dates on a calendar, remember that while no hard and fast rules exist, a typical ESG roadshow runs for one or two days. That said, some companies may dedicate three days to an ESG roadshow, while others confine the event to a single morning or afternoon.
The meetings within an ESG roadshow tend to mirror one-on-ones, running just shy of an hour. Some suggest that meetings at an ESG roadshow should begin with a 10-minute corporate overview, especially when the audience is expert in ESG but does not necessarily know the ins and outs of a company’s story.
The roadshow players A typical ESG roadshow is attended by at least two of the following corporate functions: management (CEO, CFO or CIO), corporate secretary, investor relations, senior independent director and/or ESG or CSR.
Some companies find that by having IR and sustainability run an ESG roadshow, events are easier to organize because no management time is involved. Such an approach has its pros and cons. Many contend that having the CEO participate and speak knowledgeably about ESG is indispensable because it sends a strong message that a company is walking the talk on these issues.
Michael Bennett, vice president of IR at Schnitzer Steel, based in Portland, Oregon, prefers to include CEO Tamara Lundgren on ESG roadshows ‘because it shows that ESG is really important to us’.
The audience Some ESG roadshow meetings are small groups, others are one-on-ones. While group meetings use management time efficiently, one-on-ones have their advantages, too.
Bennett points out that as Schnitzer’s ESG outreach program has grown in sophistication, one-on-ones are becoming the norm. At its most recent ESG roadshow in May, for instance, Schnitzer’s team scheduled far more one-on-ones in a nod to investor preferences. That’s because after an introductory meeting, investors tend to look for deeper dives into their own particular issues.
The itinerary Planning the itinerary for an ESG roadshow is not much different from planning a traditional investor relations roadshow: companies tend to visit places where a concentration of prospective investors is found. For this reason, Europe is a popular destination because investors there generally focused on ESG long before those in North America or Asia did.
When looking for large concentrations of ESG investors in Europe, the UK, Germany, Switzerland and the Netherlands are all good places to start.
