What we asked

We assessed the investor relations (IR) pages of the websites of 100 large companies from around the world, covering a diverse range of sectors but with an intentional bias towards those with exposure to food, forestry, fish and farming value chains to answer the following question:

Are companies using their websites effectively to engage mainstream investor interest in their sustainability exposures and management practices?

What we found

Download full benchmarking report from here

Companies, across sectors and geographies, are not yet using their investor relations webpages effectively to communicate their sustainability exposures and management practices.

Companies are missing potential benefits because:

• 'Mainstream' investor interest in sustainability is growing rapidly. So, companies that engage investors on these issues are improving their access to capital, whereas companies that don´t reduce their opportunities,
• We are all working from home and having to communicate online. Leveraging the corporate website is one the cheapest and easiest ways to support better communications on sustainability issues to investors,

Our analysis shows that companies either:

• are sceptical of the increase in 'mainstream' investor interest in their sustainability activities or
• recognise this interest but have not yet directed the people responsible for the design of their investor relations webpages to incorporate it properly.

Easy, quick and cheap to fix

Our 'top ten' communicators:

Royal Dutch Shell

Stora Enso

BASF

Novartis

HSBC Holdings

Enel

Tesco

Microsoft

DSM

Intel

Some aspects of sustainable investor communications are time-consuming and expensive.  For example, developing Task Force on Climate-related Financial Disclosures (TCFD) -compliant scenario analysis or completing environmental, social and governance (ESG) ratings questionnaires. However, adding a few details to a website is easy, quick and cheap to do.

Companies should:

• review the criteria that we have used to score companies' websites
• decide whether they agree that the factors considered would improve their transparency on sustainability with investors
• ask their website managers to update their IR webpages to incorporate the best practices that we have identified

This simple exercise could substantially improve the efficiency and quality of their communications on sustainability issues to investors.

Clear room for improvement

In general, there is clear room for improvement to better display reasonable competence, efficiency and transparency for sustainable investor communications.

Notably, there is little consistency within and across sectors or geographies. 

A few companies have extensive sustainability information on their websites.  However, this is often not directly linked to/from the companies' IR pages.

Perhaps this is:

• because these companies feel that their sustainability performance is important but not core to their overall strategy or to the long-term valuation of their shares
• because these companies do not feel that 'mainstream' investors are interested in their sustainability exposures and practices

In both respects, we would argue otherwise.  If a company does not consider sustainability issues to be important to its investors or its strategy, we would argue that they do not consider it to be important at all.

Good practice examples

Our benchmarking and scoring framework exercise has highlighted a few companies who consider sustainability risks and opportunities and the management of these as sufficiently core to bring them to the attention of shareholders.  See sidebar for the 'top ten' such companies from our scoring process.

We encourage other companies to look at the websites of these companies and to review how best to adapt their own current offering to ensure they are communicating sustainability exposures and management practices with all investors effectively.

Go further, be pro-active

Making your company's website easily accessible to 'mainstream' investors that are interested in sustainability can be considered 'basic reactive communications'.

However, for a subject that is attracting as much investor interest as sustainability, 'basic reactive communications' is an inadequate response.

Companies with a serious commitment to sustainability must go far beyond this and be pro-active in their sustainability communications to investors.

For ideas and case studies on how to do this effectively, companies can visit www.sustainable-ir.com and browse case studies and perspectives on best practice.

Top five easiest wins

To quickly and cheaply make information on its sustainability performance more accessible to investors, a company can:

• Publish a specific page or pages on the investor relations part of their website containing the key information for investors interested in sustainability
• Publish the name (and contact details) of the investor relations officer at their firm with responsibility for sustainability queries
• Ensure past presentations on ESG / sustainability-related matters are included within its investor presentation archives
• List the sustainable investment research firms that cover their company and disclose the latest ESG ratings awarded and index inclusions that the firm receives

Use www.sri-connect.com to distribute CSR/sustainability reports, to identify analysts and investors and to raise their firm's profile within the sustainability investment community.

This article and the report were written by Sally Springer and Mike Tyrrell of SRI-Connect with primary research undertaken by Ana O’Shea of Discern Sustainability