Making sustainability count for investors
How do you position sustainability for investors to earn the value it deserves?
Bladonmore’s latest webinar on sustainability saw an expert panel discuss how to cut through the breadth and complexity of sustainability data, issues, ratings and frameworks to prove the real value of a business’s sustainability work to investors. The webinar, which ran in June 2023, took the form of a panel discussion comprised of:
Investor, Advisor, Former Global Head of IR & Corporate Sustainability at BlackRock
Vice President, Head of Corporate ESG Strategy at Nasdaq
Vice President, Sustainability & Social Business Innovation at Merck KGaA, Darmstadt, Germany
Global Associate Director of Sustainable Finance and ESG at S&P Global
The discussion was chaired by David Willans, Director, Sustainability at Bladonmore.
There were several important themes that emerged. The main points are summarised below:
Understand what investors want
As always in communications, it’s important to understand your audience, to know what it is that they want and need. Investors and analysts will want to compare like for like and might be building their own reports.
It might take more time to find and deliver the precise data that investors want but doing so will help you to raise your profile and let investors see the value of your sustainability strategy.
Data is important
There is a vast amount of sustainability data available, and different investors and ratings agencies will want to see different. Whilst it is important to provide all the data you can, it’s even more important to tell a compelling story.
If your organisation doesn’t create a robust story around its data, you’re leaving a vacuum for someone else to fill. By taking control of your own narrative, you shape the way your story is perceived by investors and ratings agencies.
Don’t make sustainability an extra
Sustainability reporting now has a wide range of disclosure requirements. These requirements have been a great driver of change, making companies think about how they track and manage different aspects of their business. However, this drove lots of companies to think about sustainability as something extra, when it should be fully embedded in everything.
Sustainability is often the way that things grow, it should be central to your company strategy and decision-making. It should be easy to articulate the value because its integral to your growth.
Build trust by being honest
Being open and honest when you’re struggling with a challenge builds trust. Stakeholders understand that things won’t always go perfectly. Being clear about your problems, and providing your plans to resolve them, proves that you’re being open and giving real insight into your organisation’s progress.
Communicators should be less afraid of what might go wrong and see it as an opportunity to build trust. Honesty matters to investors and it makes you more believable once things are back on track.
Governance makes things happen
Governance is sometimes seen as the less interesting part of sustainability, but it’s where you show investors that you are delivering on your promises. When governance is done right, it builds your sustainability strategy into every part of a business. It ensures that sustainability is part of the decision-making process and moves sustainability up the corporate agenda.
Good governance creates accountability, which in turn creates success. When all the right governance in place, sustainability moves from plans into action.
Materiality processes are different in every company. Some go much deeper than others. If you’re doing all the hard work of building a solid materiality process it should be part of your story. Show people how you’ve decided what matters most to your business. And don’t just talk about individual goals that come out of it, show the connections between them and your governance, systems, polices and remuneration.
When you’re conducting your materiality process, don’t forget that things like reputation should be considered. Stories that aren’t told by your company can still move the stock price and change how investors feel. That should change the relative importance of different factors to your business.
Finally, if you want to tell a good story, you have to have a good story to tell. Investors will see through your story if it isn’t grounded in reality. Plan well and integrate sustainability throughout your business. That way you earn the right to tell a great sustainability story that investors can connect with.
If you would like more information on how Bladonmore can help with your sustainability programme, then please get in touch.