Investors and analysts seek direct SRI contact

Dec 23, 2014
<p>WeConveneExtel and SRI-Connect study probes investment community&rsquo;s preference for sustainability information</p>

New research finds analysts, asset managers and corporates all want more frequent and direct SRI and corporate governance communication, and more channels for the distribution of such information.

The survey, conducted by WeConveneExtel and SRI-Connect, finds the vast majority of asset managers and other large investors want companies to keep them furnished with as much SRI information as possible on a regular basis.

The research is primarily used to determine the winners of the Independent Research in Responsible Investment (IRRI) awards, which recognize the best in the world of SRI and corporate governance research. Though it mostly seeks the opinions of asset managers, the survey also questions corporates, analysts and research companies about the role of SRI communication and what might be done to improve it.

A quarter of respondents mention a need for more webinars, meetings and roadshows to tackle social and sustainability issues, while many others suggest the inclusion of senior management in SRI disclosures, or the nomination of a specific IR team member to be responsible for SRI communications. A further quarter mention a preference for integrated CSR, strategic and financial information in one annual report or similar disclosure, and a need to include such information in presentations to ‘mainstream’ investors.

Those surveyed are also asked to name the development they would most like to see in SRI or corporate governance research in the next year. Four requests are most prevalent: the need for more direct engagement between analysts and companies, improved transparency, better consistency and a potential standardization of the questions asked, and for research to be more company-specific and qualitative.

‘Asset managers, companies and research providers say they all want more engagement with each other,’ says Mike Tyrrell, editor at SRI-Connect and co-author of the report. ‘It’s also important to them that this contact is direct – not through questionnaires or message templates – and involves meeting in person, by videoconference or phone.’

Respondents were asked how companies might improve their communications on sustainability-related issues. Most say a move toward integrated reporting would best achieve this, while slightly smaller proportions pick out publishing ‘sustainability results’ statements and easily identified contact points for analysts as crucial factors.

The key takeaway for corporates, Tyrell adds, is that being proactive about SRI communication will pay dividends. ‘In particular, applying some really simple IR disciplines – like a bit of investor targeting, a simple communications plan or use of brokers to [organize] roadshows in a target market – to their SRI and corporate governance communications can save companies huge amounts of time and will certainly improve the quality of the discussion they have with investors,’ he says.

The corporates that performed well in the research, led by Unilver and Royal Dutch Shell, are working proof of this. ‘They are doing the ‘bread and butter’ IR things well and applying these to their SRI communications,’ Tyrell explains. ‘And they are rewarded for this SRI outreach with high investor opinions.’

The survey had replies from more than 1,000 individuals from more than 500 firms in 35 different countries, covering listed companies, asset managers, research analysts and managers.

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