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Dec 29, 2022

IR teams struggle to gain traction with new investors

Investors take top-down approach amid volatile conditions

IROs have struggled to build relationships with new investors this year given the volatile macroeconomic environment, with many planning to refine their investment case in 2023 to boost engagement, according to Citigate Dewe Rogerson’s annual IR survey.

The research, which polled 282 IR professionals from around the world, finds that 37 percent report difficulty gaining traction with investor targets and 18 percent have struggled to secure face-to-face meetings.

With macro factors and geopolitical risk dominating investor thinking in 2022, many IR teams have found it hard to get their unique message across, notes the survey: 41 percent say the volatile environment is a key communication challenge and 87 percent believe their shares are currently undervalued.

To attract more buy-side attention, 45 percent say they will refine their investment case over the next 12 months, reports Citigate. A quarter say they are planning a capital markets day over the next year, although that figure is down from 47 percent in the previous edition of the research.

‘Companies are accelerating efforts to increase engagement with a broader investor base and are striving to refine their story and tell it through wider-ranging channels,’ says Sandra Novakov, head of IR at Citigate, in a statement.

‘At the same time, they find investors preoccupied with macroeconomic and geopolitical developments at the expense of fundamental analysis, and are increasingly challenged when it comes to getting face-time with investors.’

ESG developments

The research notes that sustainability remains a major focus for IR teams, with 29 percent citing ESG reporting and engagement as a key challenge.

To help meet demands from investors and other stakeholders, companies continue to increase their use of the main sustainability reporting standards and frameworks.

In the survey, 41 percent say they report in alignment with the TCFD recommendations, a rise from just 11 percent two years ago. In addition, 38 percent are now using SASB Standards, compared with 13 percent in 2020.

The most popular reporting standard remains GRI, which follows a double-materiality approach, although the proportion of companies using it has fallen from 55 percent to 54 percent year on year, according to the research.

More than half (53 percent) of survey respondents say they ‘regularly reference sustainability in their results materials’, up from 45 percent in last year’s poll. Meanwhile, the proportion of companies holding ESG-specific events has more than doubled year on year, from 5 percent to 12 percent.