What to commun­icateCase studies

Various: Sustainable investor presentations (Part I)

  • Leading companies hold regular annual presentations to investors on their sustainability exposures and management practices
  • Ideally such presentations should focus on financially-material aspects of sustainability and contextualise the presentation of these within the operational, business and investment context of the business.
  • We extract from some recent presentations, slides that we think exemplify this executed well.

What matters in sustainable investor presentations

When thinking about what companies should communicate to investors, many people default to well-rehearsed mantras about investors needing more quantifiable, comparable data.

These mantras have been repeated consistently over the past 20 years and do not appear to be working.

"Insanity: doing the same thing over and over again and expecting different results" Albert Einstein

Following Einstein, we take a different approach and suggest that the whole focus on granular and comparable metrics is misguided.  Instead, we argue that - in their presentations on sustainability - investors need companies to:

  • Describe the company's core business and strategic direction
  • Focus on financially-material sustainability factors
  • Provide a clear line-of-sight between sustainability factors and fundamental drivers of business value
  • Demonstrate 'real world' sustainability impact
  • Make a link between sustainability factors and the investment case / narrative for their company

We highlight below cases where we believe one (or more) of these aspects has been executed well by companies.

There is more work to be done in this respect and we welcome further examples of presentations to review.  Please contact This email address is being protected from spambots. You need JavaScript enabled to view it..

L'Oréal: L'Oréal for the future

Picture1.png

Sample slide above depicts L’Oreal’s environmental risk profile, e.g. ‘biogeochemical flows’ relates to use of nitrogen propellant in toiletries/perfume sprays. Using SBTi* to define climate objectives
  • Reference made to ‘85% new or renovated products with an improved environmental and social profile’ – the company is conveying a serious commitment to and investment in product lines with sustainability future-proofing built in.
  • Creation of business models that ‘support the development of a circular economy’ with a focus on recycling and management of plastic waste –L’Oréal is showing investors that its sustainability strategy is linked to growing consumer concerns about single use plastic containers / plastic waste.
  • Financial vehicle developed to invest in ocean / forest related projects – L’Oréal is sending a mainstream signal that it goes beyond philanthropy, as this vehicle has also been devised to lead to economic returns, including carbon credits and acquisition of environmental assets.

Source | Presentation first given: 09/06/20

* SBTs are Science Based Targets. The SBT Initiative (SBTi) is a formal climate change partnership programme from CDP, UNGC, WRI and WWF.

ArcelorMittal: Pathway to low-carbon steel making

Picture2.png

This simple graphic shows how the company faces a dichotomy; benefit from the growth in low carbon energy sources, but only with responsible production.
  • Steel use intensity in the energy sector increases with trend to low carbon energy sources – the AM presentation is candid about the sales versus sustainability challenge; balancing good growth potential with need to produce low carbon steel.
  • Pathway to low emission steel making clearly set out, including embedded video to show process – use of Smart Carbon and other tech (e.g. carbon capture) highlights AM focus on green, forward thinking innovation for sustainable production.
  • Good depiction of market ‘drivers’ and ‘enablers’ – AM shows it understands all the green catalysts and stakeholders behind its low carbon strategy.

Source | Presentation first given: Sept 2020

Stora Enso: The Renewable Materials Company

Picture3.png

This particular presentation is comprehensive, it reads like a mini CSR report, with a ‘triple bottom line’.
  • The big 4 consulting firms all publish regular reports on ‘global megatrends’ – SE has aligned its sustainability strategy with several of these, including global warming and urbanisation. Linked to these are the SDGs and SE supports them all.
  • New suite of low carbon footprint products can bring competitive advantage – SE is communicating to investors the commercial appeal of wood-based materials as substitutes for finite resources. Also using the SBTi to set climate goals.
  • Forest assets given fair value on balance sheet, one of world’s largest forest owners – aims to balance ownership with rural community needs.

Source | Presentation first given: 20/10/20

Glencore: Sustainability in Mining (Virtual Summit)

Picture4.png

A performance chart has been selected for Glencore as it related closely to new focus areas in 2020.
  • Like AM, highlighting the role of its metals business in the energy and mobility transition – alerting investors to new, sustainability-oriented markets; in tandem with responsible sourcing (strategic long term supply contracts) and lowering of carbon emissions (see chart).
  • Sustainability strategy comprises four main elements, two of which are health and safety – a focus on these areas seems designed to reassure investors that the company is responding to some concerns over recent negative trends in workforce fatalities (also see chart).
  • Explains to investors how it has responded (via new committees) to new UK CG code – companies must set out purpose, values and culture.

Source | Presentation first given: 02/09/20

National Grid: A Responsible Business (Virtual ESG Investor Seminar)

Picture5.png

Use of graphic showing NG director competence in key areas – innovative to highlight and quantify board skills needed for the future.
  • Presentation in support of 3+ hour webinar with multiple presenters across each ESG pillar, and interactive ESG Q&A – engaging directly with investors to set up ‘Future of Gas’ event in 2021.
  • Paths to net zero emissions set out for UK and US businesses – demonstrating a global approach to clean energy and therefore has a consistent group-wide message for international investors.
  • Discussion of ‘skills for the future’ and strong efforts on training & apprenticeships, H&S (including mental health), community support, energy poverty – relevant messages given the clean energy transition can create 400,000 jobs.

Source | Presentation first given: 05/10/20

 

The analysis in this article was undertaken by Andy White of AWESGConsulting.  Andy has over 20 years experience in sustainable investment having worked extensively both on the investment research side and in supporting companies with their sustainable investment activities and communication.