Strategy & planning

Most companies develop, each year, a basic plan for their investor communications.  Although these IR plans can vary in their level of detail and sophistication, they usually contain:

  • the salient points of the investor communications process for the year (including dates of results presentations, target markets, roadshow plans etc.)
  • the key messages to be communicated.

Very few companies, however, have a parallel plan (an SR-IR plan) to cover their activity with SRI investors.  Such activity therefore tends to be ad hoc, reactive and inefficient.

Steps to take

An SR-IR strategy consists of four simple steps:

  • Commit
  • Set objectives
  • Make (& publish) plans
  • Define responsibilities and allocate resources

Factors to consider

Companies that fail to commit to sustainable investment communications make a mistake.  As they can no longer hide from sustainable investment they end up respond to incoming interest and questions on an ad hoc basis - secretly hoping that each enquiry is the last.  This makes the process very inefficient.  So, our first tip to companies is to: take a step back; consider the growth of sustainable investment and decide to engage.  That way you will be able to set the terms and timetable rather than having them set for you.

What are you hoping to achieve?  Having a clear and honest idea of the outcomes that a company is trying to achieve (their objectives) certainly helps.  Objectives may include being owned by specialist sustainability funds, getting included in indices, raising the level at which the company is 'rated' or simply building the awareness of a target number of your largest investors around your sustainability exposures and management practices.

When outlining their plan, companies should set out:

  • the terms on which the company likes to communicate with SRI investors,
  • its policy on questionnaire completion and
  • its approach to investor & analyst meetings.

Companies should also explain the expectations that they have from SRI research organisations.  (For example, we expect to receive a copy of whatever is written about us).

Mainstream investor communications tend to be organised on a quarterly or half-yearly cycle, but SRI investor communication does not to need to be so frequent.  Sustainability performance tends to develop more slowly than other aspects of corporate performance and there is currently insufficient capacity within the SRI analysis community to absorb quarterly reporting.  Annual performance updates are adequate for the vast majority of companies.  Communications timetables should take account of key SRI dates and sector roadshow periods.

Then, most importantly, companies should publish their SR-IR plan - ideally on the IR pages of their website - for investors and analysts to see.  Companies that don't publish their plan, can't complain when investors or analysts approach them outside their desired parameters.

Finally, in respect of responsibility definition, we recommend that companies divide responsibilities between:

  • Investor relations executives - who typically take control of managing the process
  • CSR/sustainability executives - who typically take control of supplying 'content'

Commitment; objectives; plans; responsibilities; easy.