We’ve packaged up everything you need to know about best IR practice in the time of Covid-19, how our previous winners won, and much more. Read on to gain tips and ideas
Best practice interviews with Europe’s finest IR teams
In the year that IR truly went virtual, it was only fitting that the IR Magazine Awards – Europe did the same. In October we held our first virtual awards for the European IR community, featuring video acceptance speeches, real-time competitions and 29 prizes for the best IR practitioners in the region.
As with other IR Magazine Awards, the gongs were split into two categories. In the awards-by-research categories, the runners-up and winners were decided by a survey of hundreds of investors and analysts. In the awards-by-nomination categories, companies submitted entries that were then judged by a panel of IR experts.
Below, you’ll find video interviews with many of the winners from the night. Click on the conversations to find out how Europe’s best-in-class IR teams have managed the huge challenges of the last year.
UDG Healthcare, Ireland - Best overall investor relations (mid-cap) - Best investor relations officer (small to mid-cap) – Keith Byrne
Working in IR during the Covid-19 pandemic has been challenging and unusual but hugely engaging, says Keith Byrne, head of IR, strategy and corporate communications at UDG Healthcare. Over the last six months, one of the most effective means of communication with the market has been fireside chats, he says. UDG has always done such events, but the attendance levels during the pandemic have been very strong. The company has also launched a Covid-19 mini-site aimed at both internal and external audiences.
Borregaard, Norway - Best overall investor relations (small cap)
In this video, Jørn Syvertsen, director of IR at Borregaard, discusses the impact of the Covid-19 pandemic on the Norwegian chemicals company. For example, the firm had to close its largest manufacturing operation outside of Norway. But it has been helped by its diversified strategy and flexible approach to manufacturing. Syvertsen also talks about the investor communications around two parts of the business that are used for disinfectant – a crucial part of the fight against Covid-19.
This is an extract of a feature from the Winter 2020 issue of IR Magazine. Click here to read the full article.
UK utility took home the trophy in the small to mid-cap category at the virtual IR Magazine Awards – Europe 2020 Severn Trent Water held its award-winning investor event –a sustainability-led capital markets day held at the firm’s Coventry, UK headquarters in February 2020 – just before the UK went into its first lockdown.
It was, said Richard Eadie, head of IR and sustainability at the water utility, something really new for the company. ‘Obviously you do the boilerplate capital markets days where you talk about strategy and the future but we wanted to do something different,’ he explains. ‘We felt we had quite a lot to say in this space and we wanted to really dedicate some time and focus to it.’
Severn Trent converted its office into a number of zones, each one discussing a different area of sustainability with the roughly 100 investors that came along. Eadie said his ‘heart was in his mouth’ the morning of the event as investors traveled from London for an event he described as not being very heavy on numbers or forecasts. ‘I [wasn’t] going to give them a PowerPoint presentation or any numbers they could put into their models,’ he recalls. So ‘how are they going to receive this? But it turned out brilliantly.’
As well as showcasing what the company was doing around the environment, water scarcity and net-zero carbon, Eadie says the day was very much about people: about inclusivity and diversity. So the company highlighted how it had been supporting customers who were struggling with their bills or vulnerable members of the community – but it wanted to highlight the people within the company, too.
‘We had 60 presenters from across the organization,’ explains Eadie. ‘That went from Christine [Hodgson] as the incoming chair and Liv [Garfield] our chief executive all the way through to apprentices who had recently joined and maybe come from social mobility cold spots. We had an apprentice solicitor talk about how important this role was for [her] and the impact it had had on [her] and [her] family. So it really brought home the kind of role a business can play within society and the environment.’
It was very much about linking words with actions in the minds of investors, adds Eadie: ‘That was what really shone through: that investors really started to believe our cultural story and narrative around what we’re all about, and hopefully fell in love with us a little bit.’
Watch the video below. You can jump to 8.30 to go straight to Eadie talking about why investors left with a ‘little bit of a crush’ on the company.
Resolution is culmination of four years’ engagement, says ShareAction
In what it describes as ‘a sign of the growing appeal of climate resolutions for mainstream investors’, responsible investment NGO ShareAction says its latest resolution – calling for HSBC to publish a strategy and targets to reduce its exposure to fossil fuels – has gained the support of investors with $2.4 tn in assets under management.
Fifteen institutional investors, including Amundi, Europe’s largest asset manager, Man Group, the world’s largest publicly traded hedge fund company and asset managers and owners from the UK, Denmark, France and Sweden – alongside 117 individual investors – have put their weight behind a resolution co-ordinated by ShareAction. It calls on HSBC to publish a strategy and targets to reduce its exposure to fossil fuel assets, starting with coal, on a timeline consistent with the Paris climate goals.
ShareAction says that, according to the Rainforest Action Network (RAN), the banking giant is Europe’s second-largest financier of fossil fuels, after Barclays. RAN found that between 2016 – when the Paris Agreement was signed – and 2019, HSBC provided $87 bn to some of the world’s largest fossil fuel companies.
ShareAction adds that while HSBC has revealed plans to become a ‘net zero’ bank by 2050 at the latest, its October 2020 announcement makes no mention of its funding to fossil fuel companies. In what it describes as findings that ‘cast serious doubt over the credibility of HSBC’s climate commitments’, ShareAction research shows ‘that in the four months leading up to its [net zero] announcement, the bank pumped an additional $1.8 bn into fossil fuel companies, including those constructing new infrastructure for coal and tar sands.’
‘HSBC is strongly committed to addressing climate change, in line with our clear ambition to align our financed emissions of our entire business portfolio to net zero by 2050 or sooner,’ a spokesperson tells IR Magazine. ‘We are a leader in sustainable finance and expect to provide between $750 bn and $1 tn in finance by 2030 to support our customers in all sectors to progressively decarbonize. As we work to set out the detail of our roadmap to net zero, we continue to positively engage with our customers, shareholders and ShareAction.’
The resolution is the culmination of four years of shareholder engagement with the bank, continues ShareAction in a statement, highlighting an investor letter it sent to the bank in 2019 on the issue, with signatories including Schroders, Hermes EOS and EdenTree Investment Management.
‘As Europe’s largest bank and the second-largest provider of fossil-fuel financing, HSBC has the unique opportunity to help lead the financial services sector toward Paris-aligned commitments rather than mere ambitions,’ says Jason Mitchell, co-head of responsible investment at Man Group, in a press release from ShareAction. ‘As shareholders supporting this resolution, we recognize the imperative and urgency for establishing targets and a timeline toward emissions reductions.’
Highlighting the wide-ranging support for the resolution, the release also includes a comment from the Jesuits in Britain organization. ‘Jesuits in Britain has banked with HSBC for many years and it’s about time the multinational joined the growing social movement to safeguard the future of our younger generations,’ says Stephen Power, trustee of Jesuits in Britain. ‘Echoing Pope Francis’ appeal to companies to move from fossil fuels to renewable energy, we are simply asking HSBC to encourage the companies it supports financially to move toward a low-carbon economy.’
Infrastructure company wants to reduce Scope 3 target emissions by 20 percent by 2030
National Grid, the UK infrastructure company that owns gas and electricity transmission and distribution networks in the UK and the US, has released its responsible business charter, setting out ambitious future priorities including ESG goals.
‘The world is changing pretty quickly, and I think we need to evolve pretty quickly as well,’ Nick Ashworth, London-based head of investor relations, told IR Magazine’s ESG Integration Forum – Europe.
While the charter was released in October, Ashworth offered the forum his insider’s look at what National Grid is prioritizing for the next few years (carbonization and climate are key issues) and how the company’s IR conversations with investors differ in the UK versus the US. He joined the company just over a year ago after 14 years at Morgan Stanley in various roles including head of European utilities equity research.
Ashworth believes National Grid, with £14.93 bn ($20.05 bn) in revenue in 2019 and 22,576 staff, has a huge role to play in the evolving climate change debate both internally, to reduce carbon emissions, and externally as an ‘enabler’ across society, particularly in relation to de-carbonizing power and transport issues.
While National Grid is one of the world's largest publicly listed utilities, it has been affected by the pandemic. The coronavirus crisis lowered revenues, increased costs and left more people unable to pay their bills, resulting in a 12 percent drop of National Grid’s underlying profit to £1.1 bn in the six months to the end of September, compared to a £1.3 bn profit in the same period last year. John Pettigrew, the chief executive, said at the time that National Grid was well-positioned and focused on smoothing regulatory challenges and preparing for a low-carbon future.
The charter is divided into five sections: environment; National Grid’s people; the communities it serves; economy; and governance. Within that, Ashworth broke down the ESG priorities for the future.
Environment On environment, National Grid expects to get to net zero by 2050 and has tightened up interim targets to commit to 80 percent carbon reduction by 2030 and to 90 percent carbon reduction by 2040.
‘On top of that we are also now talking about Scope 3 and reducing out Scope 3 target emissions by 20 percent by 2030 as well,’ he said. Scope 3 emissions are categorized as indirect emissions that occur in a company’s value chain.
National Grid’s other initiatives involve SF6, which is a very polluting gas used in some of its networks, and the company aims to reduce that by 2030 and beyond.
‘We don’t actually have the answers for some of these things today,’ said Ashworth. ‘So we are working with our supply chain and we are spending a lot of time with R&D trying to find new solutions for some of these problems.’
The company has also set up a responsible business unit to work with IR and think about the most relevant areas.
Social National Grid views its social responsibilities as creating and enabling the right skills to help with energy transition in the future. Specifics in the charter include diversity commitments such as the 50 percent diversity target for senior leadership at group level by 2025 and 50 percent diversity in new talent. It also hopes to get out to communities and help more by improving volunteer opportunities.
That feeds into the UK government’s 10-point plan to get the economy moving with a green recovery.
‘I think we sit in the middle of all of that. Whether it is thinking about connecting offshore wind to the mainland, or some of the hydrogen pilots and projects they are wanting to do. Some of the cleaner gas stuff which will come [in the future] and electric vehicle charging. We’re in the middle of all of this. So, it is thinking about the infrastructure requirements and how we can help with these projects,’ Ashworth said.
Governance Part of National Grid’s governance strategy is ensuring it is properly managed, that all stakeholders are listened to equally and that diversity targets are set.
‘This is our promise. This is what we want to do. But this isn’t the end of it,’ Ashworth stressed. ‘We are talking about going to net zero by 2050. Can we do it early? We’d love to. But let’s set targets and see how we do over time.’
Jurisdictional differences As for different jurisdictions, energy transition is going apace on both sides of the Atlantic but the conversation is differently nuanced depending on who National Grid’s IR team are speaking to.
The company runs electricity and gas networks in the UK, and in the US, where these are predominantly located in the northeast of the country in some states that set their own climate change targets.
‘New York and Massachusetts both have their own targets of zero by 2050. Rhode Island has a very tough 100 percent renewables target by 2040, so they are all very tough, progressive states,’ said Ashworth. National Grid is aligned with the politicians and regulators in trying to hit those targets, so what it does at the corporate level ties in with what it does at the geographical level.
In the UK, National Grid is involved in transmission and connecting large power stations to the lower voltage distribution areas, which means it tends to have larger projects and conversations around how to best deliver large-scale infrastructure.
In the US, the company is on the distribution side, so it is ‘lower level, lower voltage and lower pressure on the gas side’, he explained. There are also more conversations around gas than electricity, including how National Grid thinks about cleaning up gas over the next 30 years.
‘Are we going to electrify everything? We think [that] is not plausible. [It would create] huge amounts of disruption. Huge amounts of cost. So how do we think about that transition of gas in particular in the US?’ Ashworth said.
At the end of the day though, there may be different questions but the response is often the same.
‘The answer to all of this is always: It is not going to happen in the next year or two. It is going to take 10, 20, 30 years to come through. Some of these things will be a little slower to come through. But we are working on all of these solutions. We have huge numbers of experts in place.’
Maria Lodkina leads the charge to transform how her company and the wider Russian mining industry think about gender diversity and report on ESG factors
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The mining sector has traditionally been male-dominated in western markets, and perhaps even more so in Russia. Maria Lodkina, a young audit manager at accounting firm EY, didn’t think about that too much in November 2013 when she decided the time had come to turn the corner in her career and responded to an interview invitation from the gold-mining company Polymetal International in her native St Petersburg, Russia.
Seven years later, in November 2020, she was recognized by Women in Mining (WIM) UK as one of the 100 most inspirational women in the global mining industry, a development that Lodkina says she couldn’t possibly have contemplated when she started in the industry.
‘I guess I was an enthusiastic and romantic person. Frankly, I found audit a little boring and wanted to be part of a big industrial business’ Lodkina says. ‘I didn’t really know much about mining – I was attracted by its voodoo magic of transforming thousands of tons of stone-like ore into gold by applying chemicals and fire. I know it is a highly impractical and naïve approach to career progression, but I just got lucky with my employer.’
At that time, Polymetal had recently completed its premium listing on the London Stock Exchange and became one of a handful of Russian company constituents in the FTSE 350. Russian equity stories were already frowned upon by some investors as geopolitical tensions intensified. Polymetal’s approach to overcoming investor skepticism and earning its place in the prestigious FTSE 100 index has been to excel in its international peer group by consistently delivering on promises, combining generous dividends with robust production growth and maintaining a world-class sustainability profile.
‘Companies are like people: if you are growing up having to overcome obstacles, proving your worth, it makes you smarter and more open to new experience,’ Lodkina says. ‘That’s the secret behind Polymetal’s success, particularly in its current track record in ESG factors. We started paying a lot of attention before investors did.’
Lodkina, who is now director of financial control & corporate reporting, is part of the team responsible for the company’s ESG reporting, which has been widely recognized by the analyst community. ‘ESG is integrated throughout our business operations and we have comprehensive ESG disclosures, which we present in our strategic reporting,’ she says.
WIM UK considered the company’s industry-leading non-financial reporting when naming Lodkina in its 2020 edition of 100 Global Inspirational Women in Mining alongside two of her colleagues: Tania Tchedaeva and Vasilina Tarabarova. Lodkina’s track record in promoting leadership and social initiatives also contributed to the WIM UK decision.
Last year she kick-started a campaign within her company and the mining sector in Russia to attract and retain more female talent. ‘Over the last few decades, the industry has gone through a major technological transformation that has made it fully accessible to women,’ Lodkina says. ‘The only remaining hurdle for women in mining is cultural. The best companies need to work harder to make themselves more attractive to compete for top talent.’
In late 2019, as she and a few colleagues were talking over lunch in the company canteen, they came up with the idea of launching WIM Russia to promote diversity and attract women to the industry, in partnership with WIM UK and its other chapters around the world. Polymetal’s management team supported the idea and the company became one of the founders of WIM Russia alongside Norilsk Nickel, Deloitte CIS and several other mining businesses.
As a board member of WIM Russia, Lodkina is responsible for setting the strategy and establishing partnerships with other organizations. She says the non-profit has received support from other companies in the mining industry, the media and leading engineering universities across Russia.
Maria Lodkina is one of the co-founders of Women in Mining Russia
WIM Russia has hosted a series of webinars and leadership interviews covering a wide range of topics, including mining careers, operational efficiency, personal finance and time management. Lodkina says it is important to use these leadership events to tell the real success stories of female professionals who have had distinguished careers in mining.
She has also successfully pitched the initiative to integrate diversity into Polymetal’s growth strategy for the future. The company has committed to deliver on the principles of non-discrimination, inclusion and diversity for the board and the company’s employees. This involves increasing gender diversity in every function and working to reduce the gender pay gap. As a starting point, the company provided diversity training for all hiring managers and set a target of having female representation of 40 percent among candidates for management positions. The company is especially targeting the recruitment of women with expertise as geologists, surveyors, technical specialists and managers, roles that are traditionally dominated by men.
‘We believe that by formalizing the company’s efforts we elevate it from a topical conversation to being part of the business plan and strategy,’ Lodkina explains. ‘At Polymetal, we’re playing a leading role and, as one of the largest mining companies, we believe our efforts can be an example to others.’
A leader in sustainability The inclusion of Lodkina, Tchedaeva and Tarabarova in the 100 Global Inspirational Women in Mining list is the latest in a series of awards and accolades Polymetal received last year.
At the IR Magazine Awards – Europe 2020, the firm took home the best ESG materiality reporting (small to mid-cap) award, adding to the two awards it won at the IR Society’s Best Practice Awards 2020 and the recognition of its annual report in the metals and mining sector at the Moscow Exchange 2020 Annual Report Competition.
Lodkina says that 10 years ago, it was difficult to imagine sustainability becoming the important topic it is today. But now Polymetal reports using the Global Reporting Initiative, Sustainability Accounting Standards Board and Task Force on Climate-related Financial Disclosures standards and frameworks, and is considering using the Task Force on Nature-related Financial Disclosures from 2022 onwards.
‘This is a new reality for financial professionals,’ Lodkina says. ‘You need to make a connection between financial and non-financial information. I believe this is a new role for financial controllers and CFOs: not only thinking about dividends or production or the financial perspective, but also looking at the larger business context, putting it all together to analyze a holistic picture for stakeholders.’
For companies looking to make similar strides in ESG reporting, she recommends forming a cross-functional working group rather than dealing with the issues separately: ‘We have taken practical steps inside of Polymetal in many departments – finance and corporate governance as well as local operations, mine construction and infrastructure – to work together so that we have a comprehensive process around assessing the risks affecting the company’s sustainable development and integrating that into our overall strategy.’
