Prepare for an ESG investor day to become a popular fixture in your IR calendar
There’s no getting away from the fact that ESG sits at the heart of many company decisions and actions, and increasingly guides the investment decisions of new and existing shareholders alike. So in a world where importance and awareness of ESG issues is increasing, should firms look at adding dedicated ESG investor days to their suite of communication tools? And how can they do so effectively?
In this report, we explore the issue and hear the experiences and advice of IR and ESG professionals across Europe and North America.
Lauren Swales, AstraZeneca
Why an ESG investor day? ESG investor days offer companies the opportunity to hold a dedicated event where they can report on their ESG progress, explain how ESG drives – and is integrated into – company strategy and priorities, and open a two-way channel to engage with investors. For Schneider Electric, an ESG investor day was the ideal platform to communicate its ESG activity and link this to its broader company picture.
‘ESG investor days may have been a minority pursuit until now, but they will become a standard part of the corporate calendar as investors become more demanding of issuers,’ says Amit Bhalla, senior vice president and head of IR at Schneider. ‘As the topic of ESG increasingly became more important to investors globally, we were keen to share our experience and showcase our efforts for all our stakeholders.
‘Schneider felt strongly that as a leader in digitization for efficiency and sustainability – and an early mover in this aspect – we had a compelling story to tell and to showcase how we are contributing to a net-zero world.’
Promoting its recent report was one of the main reasons for AstraZeneca’s event, alongside addressing challenges and exploring investor sentiment. ‘We had recently published our annual sustainability report, so our event was an opportunity to speak with shareholders on our progress to date,’ explains Lauren Swales, director of investor relations.
‘We covered all the highlights in 2021 and flagged some of the challenges we faced in achieving our ambitious goals. Shareholders had the chance to ask questions and drill into details on their specific focus topics.’
Shell is no stranger to ESG investor days, viewing them as a vital opportunity for the company to dedicate time and resources to discuss ESG matters, as Anna Dumanska, IR officer for ESG, notes.
‘ESG is an integral part of Shell’s strategy and an area of increasing investor interest,’ she explains. ‘We’ve been holding an investor day covering these topics for a few years now, and it has evolved into a critical part of our engagement program.’
As keen as companies are to hold ESG investor days, however, does the investor appetite to attend match? Yes, says Louis Coppola, co-founder and executive vice president at Governance & Accountability Institute.
‘Just coming to the table and organizing a dedicated ESG day sends a signal to the market that can be respected,’ he says. ‘I think there is an appetite for them, especially among investors focused on or specializing in ESG – pension funds and sovereign wealth funds, in particular.
'For mainstream investors, that appetite is still growing, although you do see more of an appetite in Europe with mainstream investors for these.’
Just organizing a dedicated ESG day sends a signal to the market that can be respected
Finding the right strategy Any investor day is a big commitment in terms of time, cost and resourcing. The first question companies should ask themselves is: do we have enough to say to justify not only our outlay and effort, but also the time and interest of our investor audience?
Getting the strategy right from the start is a vital first step, says Bhalla. ‘Conveying your company’s ESG narrative during a dedicated investor day is an opportunity to show investors that ESG is high on your radar,’ he says. ‘By interlacing the story with your company’s long-term objectives, you can communicate how your company is proactively improving or striving to be an industry leader in terms of ESG.
Ryan Weispfenning, Medtronic
‘Ahead of all of that, however, the first step to creating an ESG investor day is to construct and produce a corporate ESG strategy that is ‘baked in’ to management thinking.’
Adapting the day for different audiences is also important, notes Ryan Weispfenning, vice president and head of IR at Medtronic.
‘Holding a specific ESG investor day really comes down to understanding the segmentation of your audience,’ he says. ‘Integrating ESG into investment decisions is a rapidly evolving field and there is a wide spectrum of how it is handled by investment companies.
‘On one end of the spectrum, you have firms where we work with the industry analyst and the ESG analyst separately. On the other, you have firms that integrate the industry and ESG analysis.
‘We may reach a time when ESG is completely integrated into all investment firms. Until then, it’s very important for IR teams to adapt their communications for these different audiences. By holding a specific ESG investor day, you can go deep on topics that are of high importance to those who incorporate ESG into their analysis and investment decisions.’
