A holistic approach
What makes an ESG roadshow best in class? Some believe the ESG roadshow can act as an important catalyst for companies on their ESG journey.
As CEOs, CFOs, CIOs and even independent directors bone up on statistics about net-zero emissions and workplace safety initiatives to prepare for whatever questions may arise, these professionals are absorbing valuable information. They are also getting on-the-job training for speaking a new type of language, just as they once gained fluency by diving into discussions of Ebitda and other financial metrics.
Ditto for IROs. As ESG increasingly becomes part of the IR remit, the ability to engage with ESG investors matters more than ever. Not far off, some believe, is the day when an IRO’s performance will be measured, to some extent, by his or her engagement with ESG investors. It’s entirely possible that in the future one component of an IRO’s compensation may be success at initiating ESG engagement through vehicles like roadshows.
Arguably, the most valuable form of ESG engagement is dialogue, so the roadshow can be viewed as an opening act. Remember: it’s not necessary to respond to every investor’s ESG question on the spot.
As investors demand more granular detail on climate change and other complicated topics, IROs and other executives need to overcome the urge to answer quickly with generalities and instead promise to furnish more thorough answers later. After all, emailing or telephoning an investor in the days following an event is a golden opportunity to strengthen a burgeoning relationship.
In the end, the best ESG roadshows may be ones where management, IR and the sustainability team gain as much insight as they impart. If, for instance, an investor is enthusiastic about a new ESG framework that has just arrived on the scene, find out why. What IROs learn can make an enormous difference when improving ESG websites, introducing new topics and perspectives within sustainability reports, and exploring novel strategic avenues and approaches.
The give-and-take of investor dialogue can help you burnish your ESG program like nothing else. Ultimately, the true value of an ESG roadshow may lie in the two-way communications of companies and investors that make the time to engage meaningfully with one another about a host of pressing concerns.
