As one of the most sustainable cities in Europe, Amsterdam – with its barges, canals and bicycle-filled streets – was a fitting location for this year’s IR Magazine Global Forum & Awards, where each day of the two-day event saw a panel take on different aspects of the ESG debate.
While the 145-plus attendees from more than 30 countries were also treated to sessions covering everything from trade, tax and Trump to the technology behind passive investments and a candid fireside chat with Andrew Gebelin, head of research at Glass Lewis, this year the focus was firmly on ESG. And in a sign of just how timely that focus was, Amundi announced plans to integrate ESG into all its funds by 2021 on the morning the event kicked off.
‘ESG is no longer just a buzzword’ was the message coming from the panel on day one, where Laurie Havelock, IR Magazine’s editor-at-large, quizzed Michel Karimunda of Nordea Bank and Andreas Posavac, managing director of global M&A, governance & corporate advisory at Ipreo by IHS Markit on how ESG has been adopted by activists as a new tactic. Panelists agreed that ESG was ‘one of the biggest trends’, noting that passive investors are among the most active in voting on ESG matters and are often happy to lend support to more ‘active’ counterparts. ‘Before, ESG was a buzzword but now it’s really become a material topic to discuss,’ said Posavac.
Karimunda agreed, adding that ‘from an investor relations perspective, you need to really understand what your investors think about these issues. Get the information first and then maybe you can start to engage.’
Going for goal
This was excellent advice given that the ESG-focused session on day two saw Mikkel Skougaard, senior expert in sustainable development at MOL Group and former IRO for the Hungarian oil and gas giant – who also has a background in governance at BlackRock – discuss sustainable development goals and ESG disclosure with a panel comprising two IR professionals and two investors.
Karlijn Van Lierop, director of responsible investment, sustainable investing, climate change and impact investing at MN – which has assets under management of €130 bn ($148 bn) – explained that at her firm, the investment universe is narrowed down from around 2,000 companies to roughly 600. And to do that ‘we need data,’ she said.
The data that makes up those investment decisions comes from ‘a combination of having external information from ESG data providers, having our own analysis and then having those really in-depth conversations with specific companies,’ explained Van Lierop.
Natalia Rajewska, ESG analyst at Aviva Investors – which has around $460 bn across different asset classes – also stressed the importance of dialogue, adding that Aviva welcomes direct contact from corporates on ESG issues.
‘Something we often say to companies is, Reach out to us. Ask us questions,’ she explained. ‘All our ESG teams are very busy but we never turn away a company that is proactively reaching out to us and asking what research providers we use, what kind of data is important to us or what we deem as important to their sector or their company. We are more than happy to have these conversations.’
For the two IR professionals on the panel – Karl Mahler of Roche and Lili Huang of De La Rue – ESG is key to the materiality of their company, and the shareholders and customers they represent. Each also takes a long-term view – perhaps even more so than some other companies given how long these two firms have been in business: Roche was founded in 1896 and De La Rue even earlier, in 1813.
As Huang said, ‘a long-term view is integral to the firm’, while Mahler said that for Roche, ESG is essentially a ‘license to operate’. This way of thinking is so ingrained, in fact, that Mahler added: ‘We’re not doing this for the investors. For us ESG is part of the business. You either live it or you don’t.’