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Sep 14, 2022

‘Siloed sustainability tells us something about a company’: Highlights from the IR Magazine Forum – Canada 2022

Macro-driven markets, virtual engagement and ‘peak ESG’ feature in conversations

When IR professionals gathered in May for the IR Magazine Forum – Canada 2022, there was plenty to discuss.

The Canadian market, like others around the world, had been hit by investor concerns over inflation, slowing global growth, central bank tightening and the war in Ukraine. But the country’s materials sector had also picked up interest given the sharp rise in commodity prices.

The first session tackled the various macro factors driving markets in 2022. ‘It’s really tough times in terms of how you are going to finance your growth,’ said one speaker. ‘A lot of investors want full transparency and clarity on the balance sheet and your longevity as an organization.’

Next, the conversation turned to how to communicate your company story to a variety of stakeholders. The session investigated how IR teams should approach messaging to investors with different styles and methodologies.

‘Investors will have different time horizons, but we have just one so I think it’s important not to change your underlying story,’ said one panelist. ‘I’m somewhat constrained by who we are. But you are keyed into what they want to know. And they want to know about fundamentals.’

Speakers noted that cash generation had become far more important in the current market. ‘That had not really been a major part of our narrative before – it was about growth,’ the audience heard. ‘The conversation has very much steered toward pulling yourself up by your bootstraps and the kind of cash you are able to deliver.

Hybrid IR and ESG

Following a morning coffee break, delegates returned to their seats to hear about investor targeting and engagement in a world where IR teams need to mix physical and virtual outreach.

Seven in 10 portfolio managers say they won’t make an investment without seeing the whites of the eyes of management, noted one speaker: ‘Assuming that stat still holds, certainly there’s significant importance to in-person meetings.’

‘One of the benefits [of virtual] is that you can reach out and touch a lot of investors in a single day,’ said another panelist. ‘We did a fixed-income offering, and we had the ability to talk to 50 people in a day so it was really helpful from a marketing perspective.’

The panelist pointed out, however, that physical meetings are better for forging a bond with the investment community: ‘There’s a lot to be said for building a relationship that way and, in particular, building a level of trust with larger investors.’

There was time for one more session before lunch, with attendees hearing about the evolving ESG landscape and what it means for sustainability reporting.

‘It’s a field that’s moving constantly,’ the audience was told. ‘Maybe in the last 12 to 18 months, we had something of peak ESG, where I think if you were in an extractive or emitting industry you got a lot of questions from your investors about your ability to sustain your business. I think things have become more rational. In the ESG space, you can invest in a wider selection of companies today than you could have done 18 months ago.’

Roundtables, investor days and investor Q&A

After the lunch break, delegates took part in a session called the exchange, where IR professionals have the opportunity to move between roundtable discussions covering different topics.

The roundtables covered four areas:
– How to engage management teams around ESG
– How to communicate your business sustainability story
– Working with the sell side in the current market environment
– The evolving skill requirements for IROs in 2022.

Following an afternoon break, there was time for two final sessions. The first looked at creating impactful investor and analyst days – a key area given that so many companies want to reset their narrative following the pandemic.

The final session, as is customary at IR Magazine Forums, was a Q&A with the buy side and sell side. Attendees were encouraged to submit their most pressing questions to a panel of investment professionals.

One question focused on how investors and analysts source ESG information about companies. ‘I think we would probably avoid the [corporate] sustainability page initially, just because that’s where sometimes everybody throws all their sustainability information,’ said one panelist.

‘A truly sustainable company is going to tell its story in a different way from one that isn’t. Siloed sustainability tells us something about a company, and it’s not necessarily the best thing.’

For more information about the IR Magazine Forum – Canada 2022, please click here.