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Apr 18, 2024

ESG reporting and engagement: Seven tips for IR teams navigating new rules and evolving investor preferences

At the recent IR Magazine Forum in Toronto, Canada, IR professionals came together to discuss how to engage investors in a challenging market.

In light of the increased reporting requirements being expected of organizations, I participated in a session on ESG reporting and engagement, advising how IR professionals can navigate new rules and evolving investor preferences. Here are the key tips and takeaways from the panel discussion.

1. Put a sustainability strategy in place
In a landscape marked by constant regulatory shifts, having a sustainability strategy in place is critical for success. As investors seek deeper insights into how organizations are progressing toward their sustainability objectives, sustainability is becoming a risk-management tool. Therefore, a solid strategy is a way to future-proof an organization and improve the resilience of the company. Ultimately, ESG considerations should permeate all departments –it’s not just about compliance; it’s about embedding sustainability into the company’s DNA.

2. Perform a materiality assessment
A robust materiality assessment helps to identify social and environmental concerns for investors. Strive for alignment using a double-materiality assessment, evaluating issues that have an outward impact and those that stand to impact the business. Gaining these insights will help you refine your business’ purpose and strategy. Once you’ve identified your issues, categorize them into pillars to make it easier for your audience to navigate.

3. Conduct peer analysis
After completing your materiality assessment, conducting peer analysis becomes crucial for enhancing your organization’s ESG reporting. Make sure to benchmark against industry peers and ESG reporting leaders to gain insights into best practices and standards.

4. Understand the audience for your sustainability report   
Unlike other regulatory requirements, a sustainability report may engage a broader audience such as customers, employees, investors and other stakeholders. To ensure your report meets expectations, understanding the needs of all your relevant audiences is important. The content should therefore be tailored to each of these audiences’ expectations and concerns related to ESG.

5. Measure success with KPIs and a KPN
When reporting on your company’s KPIs, also provide a key performance narrative to explain past and future trends in performance. Provide context behind your metrics by detailing why you are succeeding and what the future trends will be.

6. Engage in a feedback loop
Engage with internal and external stakeholders regularly to ensure you understand their expectations. This clear feedback loop creates transparency in your reporting, which in turn helps to demonstrate continuous improvement.

7. Aim for progression, not perfection
When it comes to ESG reporting, don’t shy away from going beyond the discussion of success. Be forthcoming by including a transparent discussion around challenges and shortcomings, too. Good reports share learnings, best practices and plans for improving performance in the future, as well as focusing on continuous improvement. 

Reporting best practices for IR professionals
When communicating your organization’s positive, yet realistic ESG narrative to the market, consider these tips:

  • Be transparent – Be clear about the inherent challenges faced by your sector. For example, if you deal in natural resources, directly address issues such as environmental impact, resource depletion and community relations
  • Demonstrate a commitment to improvement – Acknowledge historical practices and demonstrate a commitment to short and long-term betterment
  • Focus on where you can make a difference – Your materiality assessment continues to be your go-to. Focus on where you can make a difference
  • Be authentic – Avoid overstating achievements or making misleading claims.

Sylvie Harton is chief business strategy officer at Lumi Global, where she leads the firm’s future growth strategy. Harton and Tracey Grove from DWF recently shared invaluable tips for companies to report on ESG with integrity in a webinar. Access the recording of their insights by clicking here

Sylvie Harton

Sylvie Harton is the chief business strategy officer at Lumi Global where she leads Lumi's future growth strategy. Prior to her role at Lumi, Harton was SVP, Strategy & Global head of IR and PR solutions at Notified where she led M&A, strategic...
Chief business strategy officer