QWith whom from a company do SRI/ESG analysts or investors prefer to communicate?
Analysts and investors like to communicate with different people at different stages: with CSR / sustainability managers for broad information on sustainability programmes; with technical specialists for specific aspects of practice; with members of executive management for issues of significant financial materiality; with non-executive directors for corporate governance related matters. The key thing is finding the right communicator for the right message.
QWhich are the best ESG/SRI conferences to attend?
Two types of SRI/ESG conferences may be of interest to companies:
SRI-CONNECT publishes a Global SRI & CG Diary that lists these conferences - mainly the industry conferences).
The following brokers are known to organise regular (annual) broad-based ESG/SRI conferences:
Others arrange conferences on more specialist themes and on an ad hoc basis.
QWhy are we never asked about sustainability issues on 'mainstream' roadshows?
This is a 'chicken and egg' problem. Companies typically don't make themselves available to address these issues on roadshows so the analysts and portfolio managers that are interested don't attend the meetings … so the companies conclude that the whole firm isn't interested.Read more
The way to break the cycle is to check - ahead of any roadshow - whether the asset managers that you are meeting have sustainability analysts / PMs and - if so - to actively request that they receive an invitation to the meeting.
QHow should webcast / video / telecoms technology be used in SRI communications?
Sustainable investors & analysts like to meet companies directly but they also like to avoid CO2 emissions. Even before COVID-19, sustainable 'corporate access' used webcasting and videoconferencing technology extensively. It should be a cornerstone of any company's sustainable investor outreach.
QWhy can't we just talk to the ESG ratings analyst that covers us - like we do with sell-side brokers?
IROs who are used to communicating directly with sell-side analysts are often surprised that SRI analysts (from ESG ratings agencies) do not appear to respond to similar approaches. In reality, some SRI/ESG analysts from research providers really welcome direct dialogue with companies while others fend it off.Read more
One reason given for analysts' reluctance to engage directly with companies is that it would compromise their independence. We do not think this argument is credible. There are plenty of ways of ensuring independence that also allow for direct contact.
We suspect that 'the cost of contact' is a more significant reason - whereby it is cheaper for research firms to send questionnaires and use bots to scrape websites automatically into templates than it is to commit analysts to in-depth engagement.
Perhaps most significantly, ESG analysts do not ask for direct conversations with companies because these are never offered - hence, in a vicious circle, they are never asked for.
In our opinion, companies should always reach out and seek direct dialogue with the companies that cover them as this typically leads to a much better understanding of the company by the analyst.