Shareholders are becoming more sophisticated in their expectations of how companies combat climate change, delegates heard at the hybrid IR Magazine ESG Integration Forum – Europe this week.
Dr Márcia Balisciano, global head of ESG and corporate responsibility at RELX and one of the panelists at the forum, said conversations with investors have gone from ‘do you have…?’ to ‘how are you doing…?’ People are looking to understand more about what the companies they hold a stake in are actually doing to achieve ESG goals, not just whether those companies are doing it at all.
IR Magazine brought investors and issuers, IR, governance and sustainability professionals under one roof for the first time in London since November 2019 as pandemic restrictions eased. A large international audience observed and posed questions online.
Traditionally, this popular forum focuses on responding to shareholder expectations about ESG. Given the increased pressure on companies, investors and regulators to consider all stakeholders in their activities, however, IR Magazine decided to also explore those aspects in the forum panels and sessions.
Delegates heard how increasingly important it is to define and articulate corporate purpose. It became clear throughout the day, especially during the social session, that it is vital to understand and communicate purpose, because these issues are even coming up during AGMs via shareholders’ questions.
Non-financial information in the business community is almost as valuable as financial information, noted Mark Babington, executive director of regulatory standards at the Financial Reporting Council. He said stakeholder capitalism is not only about long-term value creation, but also about preventing value destruction, and non-financial information informs investors and companies on these issues.
The Intergovernmental Panel on Climate Change, the United Nations body for assessing the science related to climate change, reported in February that urgent action was required to deal with increasing climate risks. Ed Heaven, head of sustainable investment at Montanaro Asset Management, noted during his panel that there is a climate emergency happening and the pressure is on everyone in society to take action more quickly.
Delegates heard that having the right tools is important to making data-driven decisions around ESG issues. Keren Pakes, vice president of communications and ESG at Bright Data, highlighted in her study that about two thirds of businesses cited a lack of software as a main barrier to accessing data.
Employees are increasingly important in an ESG-conscious environment. As mentioned in IR Magazine’s Stakeholder Management report, employee relations is the most-reported element in the annual study, and it was referred to throughout the forum. The pandemic-driven Great Resignation has highlighted the need for company executives to look after their most valuable assets.
Delegates were urged not to forget their suppliers, either. Jono Ekin, sales manager for ESG at One Trust ESG, mentioned that most impact is happening in company supply chains, so that was important to consider in ESG communications.