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Oct 11, 2022

Activism, ESG, corporate culture: Top takeaways from IR Magazine’s summer events

Tough fiscal conditions, shareholder activism, the S in ESG, corporate culture, crisis communications, disclosure requirements and ESG skepticism were among the myriad of topics discussed over summer

The IR Magazine Think Tank – East Coast was held in New York on May 18. The event opened with a discussion on macroeconomic conditions, from record levels of inflation to the war in Ukraine and slowing global growth. Amid tightening fiscal conditions, cash is more valuable than ever, the audience heard. Every dollar of cash a company is producing today is worth more, while every dollar of forecast growth is worth less.

The next session focused on shareholder activism. The first three months of 2022 saw 73 new activist campaigns, marking the biggest quarter on record, according to data from Lazard, so there was plenty to discuss.

A new generation of activists is trying to make its mark, the audience was told, so don’t just look out for familiar names on the share register. Companies were also advised to have a ‘day one’ action plan ready, set up in partnership with their various advisers, to avoid ending up on the back foot when a campaign launches.

The New York event held two panels on ESG. The first looked at the best way to measure and report your company’s ESG performance, while the second considered sustainability programs in the context of stakeholder capitalism.

The SEC’s new climate disclosure rules featured heavily in the discussions. We are shifting to a time when companies must be a lot more accountable for their data and communications around climate, the audience heard.

Delegates were also reminded that, where firms don’t disclose ESG data, investors will try to fill in the gaps so issuers with good disclosure can be reassured that investors are working with accurate information.

Balancing act

Attendees heard how IR teams are balancing virtual meetings with in-person events and blending sell-side events with direct engagement. They also received a masterclass in putting on hybrid events.

The penultimate session of the think tank focused on IR careers, with presentations and panel discussions on the development of the profession and how to achieve your own career goals.

Speakers pointed out that IROs are in a privileged position where they have touchpoints with basically every part of the business. You can use that to build connections and think about how you would like your role and career to develop, delegates were told.

The final session featured a Q&A with a panel of investors. Topics ranged from the likelihood of a recession in the coming months to how many meetings it typically takes for an investor to buy into a stock. With valuations way off their highs, attendees heard that now may be the time when long-standing relationships with investors could be converted into an investment.

Scope 4 emerging

Speakers at the first IR Magazine ESG Integration Forum – Asia, held virtually on June 9, discussed how climate risk and net-zero goals have become a huge focus for investors in the region, while noting that companies need to be able to talk fluently about a wide range of sustainability topics.

‘The past two years have really raised the heat and the pressure on companies to transition to a low-carbon future,’ said Esther An, chief sustainability officer at Singapore-based City Developments. ‘Everybody has learned that the health of our planet, people, business and economy is interconnected and inter-related.’

Ralph Dixon, director of environmental investments at YTL Corporation, the Malaysian infrastructure company, agreed that the sustainability space is ‘evolving very rapidly’, noting the emergence of Scope 4 emissions, also known as avoided emissions, as a new issue.

‘We’re going to see more and more demands from stakeholders such as investors and lenders, and they’re going to be more onerous on companies to disclose,’ he said. ‘Transparency has to increase.’

This article originally appeared in the Fall 2022 issue of IR Magazine.

 

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