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Nov 01, 2023

‘I’ve got a CO2 budget for travel: AstraZeneca IR head talks corporate access in the sustainability era

Andy Barnett on emissions budgets, finding a rhythm on meetings and managing 30+ analysts

‘We set ourselves quite ambitious goals in terms of reductions in travel,’ says Andy Barnett, vice president and global head of IR at AstraZeneca.

That’s not a statement you’d have heard from someone in investor relations pre-pandemic, when the world had yet to realize the full potential of virtual meetings or just how rapidly the effects of climate change would make themselves felt. But times have changed. In today’s era of net-zero and climate goals – and authenticity – companies are under increasing scrutiny and pressure to back up what they say with what they do.

Andy Barnett, AstraZeneca
Andy Barnett, AstraZeneca

Between 2015 and 2022, AstraZeneca achieved a 59.3 percent reduction in Scope 1 and Scope 2 emissions, while a multi-country investment in reforestation is set to begin removing residual emissions from 2030.

When it announced that particular $400 mn project in June 2023 – which will plant 200 mn trees in Brazil, India, Vietnam, Ghana and Rwanda – AstraZeneca said it was on track to reduce greenhouse gas emissions from its operations and fleet by 98 percent by 2026 and halve its value-chain footprint by 2030. That means the company is en route to a 90 percent absolute emissions reduction and science-based net-zero by 2045 at the latest.

Another quiet but personal way AstraZeneca is seeking to cut its carbon footprint is by limiting how much staff can spend on travel – not in monetary terms, but rather in emissions. 

‘I have a budget for the amount of CO2 I’m allowed to emit,’ explains Barnett. ‘I know how many kilograms of CO2 each flight accounts for and I have to manage within the budget, which is set at considerably less than 2019 levels.’ 

Listen to Barnett on The Ticker Podcast from IR Magazine talking about his first year in IR, where he focuses his efforts and – of course – IR after the Covid-19 spotlight.  

Finding a rhythm

For Barnett – who moved into investor relations when he took on the lead IR role at the UK drugmaker in June 2022 – and the AstraZeneca IR team, this of course means a reduction in face-to-face meetings. But Barnett stresses this remains necessary to the company-investor relationship.

‘I don’t think we can do away with face-to-face meetings,’ he explains. ‘This is an area where developing trust with key stakeholders is very important and developing that relationship virtually is certainly more difficult if you haven’t met in person before.’ 

He sees pros and cons to each approach and the team conducts some activities in person, while others happen virtually. ‘The hybrid approach of face-to-face and virtual seems to be something we’re finding a rhythm on,’ he says.

The company’s roadshows are a good example of this flexibility: AstraZeneca held an in-person roadshow earlier in 2023, but its more recent half-year roadshow was entirely virtual.

Over the course of four days, Barnett, CEO Pascal Soriot, CFO Aradhana Sarin and other members of senior management – ‘We get a lot of questions on R&D,’ notes Barnett, so ‘our R&D leaders play a key role in roadshows’ – met with more than 100 investors across more than 30 cities. That is far more than would be possible in person, while still giving key investors that sought-after ‘quality, dedicated time with senior leaders’.  

Virtual roadshows are a trends that have remained post-Covid

High-density destinations 

In a low-travel world where virtual meetings sit easily in the calendar, how does AstraZeneca choose what should be virtual or where IR – and management – should spend that CO2 budget?

For Barnett, the answer is largely determined by shareholder distribution. ‘We pick cities where there is a concentration of larger shareholders where we think our time is going to be maximally useful,’ he explains. That means New York and Boston as well as some destinations on the West Coast, but AstraZeneca also has a high concentration of shareholders in Stockholm and London, while Barnett says investors in both Shanghai and Tokyo proactively engage with the company, too.

In addition, there are many options for IR-only travel, whether in person or virtually, though in person can often be tacked on to a trip to a major hub. ‘We tend to do a lot of central US, a lot of continental Europe,’ says Barnett. ‘We are increasingly looking at the Middle East in terms of investors that have interest in the company and we tend to do quite a bit in South East Asia, Australia and New Zealand that is IR only.

‘This doesn’t mean to say we don’t have management sometimes participating in key events with key shareholders, but I’d say those are the places we’re routinely visiting in the absence of management.’

While some destinations will never go out of fashion, Barnett says it’s important to keep an eye on shifts in the investor base when planning corporate access. ‘The shareholder base may evolve over time, depending where the interest in the company is, and where the interest in healthcare is more generally, because we often find that interest in our company does track in parallel to increased interest in healthcare and pharmaceuticals,’ he explains.

Divide and conquer: Managing the sell side 

As interest in AstraZeneca has increased – in no small part because of the role it played in developing a Covid-19 vaccine – so too have the number of analysts covering the company. Talking to Barnett in September, he said the company had 32 analysts at the time – well above the 22.5 global average for even the largest companies in IR Magazine’s Global Investor Relations Practice Report 2022.  

As well as a high number of analysts, AstraZeneca boasts a relatively large IR team of eight (including Barnett), allowing a ‘divide and conquer’ approach to the sell side. Barnett says analysts are given a key point of contact within the team: ‘We talk to the analysts about not being able to do everything, we talk to them about the most important engagements, where they would definitely like us to participate – and we try to prioritize.’

What moves the market

What about the quality of coverage when you have so much? ‘I don’t tend to get into whose research is better,’ says Barnett. ‘But we do spend quite a bit of time trying to understand which analysts are likely to be more influential in moving the market.’ This, he concedes, is not a precise science: ‘Some pieces of research will move the market more and it’s not a one-size-fits-all formula.’

He says research will often differ depending on the covering analysts’ interests and expertise – or simply the story they’re looking to tell. He notes everything from late-stage R&D,  financial accounting, company culture or AstraZeneca’s commitment to the environment and sustainability as specific areas of sell-side focus.

Barnett and his team also have ideas about where investors might benefit from further education. ‘We have ideas for which aspects of the company are not well covered that we think warrant focus,’ he explains. ‘We will have discussions with analysts about what the market may be under-appreciating in terms of the company. We work with analysts on helping to educate investors because that’s exactly what we’re trying to do: help educate the investment community on the business.

‘If there are certain aspects that get less focus than they deserve, addressing that balance is a key role played by IR.’

Garnet Roach

Garnet Roach joined IR Magazine in October 2012, working on both the editorial and research sides of the publication. Prior to entering the world of investor relations, her freelance career covered a broad range of subjects, from technology to...

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