Best practices for communicating your ESG messaging online
25 May 2017
By Rana Abdel Fattah
In a previous post we discussed how ESG investing initiatives are increasingly becoming a top priority for investors, and quickly becoming mainstream. Investors nowadays truly value companies that have a solid ESG approach, putting more money towards them as they tend to have a higher green revenue exposure – and are more likely to actually fulfill their sustainability goals. According to the US SIF Foundation?s 2016 Report on Sustainable and Responsible Investing (SRI) Trends in the United States, ?as of year-end 2015, more than one out of every five dollars under professional management in the United States?$8.72 trillion or more?was invested according to SRI strategies.?
Some of the world?s largest and most profitable corporations have established ESG initiatives that aim to improve social and/or environmental conditions beyond their bottom line. While an ideal outcome is to fulfill the goals they set out to accomplish — whether it?s connecting people to the internet in developing countries or reducing fossil fuel output. For investors, however, these consumer expectations translate to key drivers of revenue, which ultimately influence their investment decisions.
But just as quickly as ESG messaging becomes a standard component of your communications portfolio, investors and consumers have become cynical about a company?s true contribution to social and environmental impact.?
Now more than ever, your company?s ESG performance has a role to play in telling your larger investment story.?Here are three best practices to help make sure you do so.
Tell a true story.
When determining and refining your ESG key messages, make sure you understand the context of your sector so that you can best anticipate what potential investors will be looking for.
Know your shareholder base and your board of directors? priorities. Touch base with both about their current view of your ESG initiatives: are there significant differences in messaging? Where does their feedback overlap? Through cross-referencing board expectations with investor interest, you?ll be better equipped to tell your ESG strategy in a way that resonates beyond the bottom line.
Make sure your ESG narrative is well integrated.
Some companies are now releasing what?s called an integrated report — an annual report that includes a narrative on diversity and sustainability alongside primary revenue metrics. The International Integrated Reporting Council (IIRC), a global coalition of regulators, investors, companies, standard setters, the accounting profession, and NGOs, provides guiding principles and content elements for integrated reporting. According to the IIRC:
?An integrated report aims to provide insight about the resources and relationships used and affected by an organization ? these are collectively referred to as ?the capitals? in this Framework. It also seeks to explain how the organization interacts with the external environment and the capitals to create value over the short, medium and long term.?
For instance, Royal DSM, a global science-based company active in health, nutrition and materials, released an online integrated report for 2016 that includes at-a-glance information on their sustainability efforts alongside their revenue and expenditures. By placing these metrics side by side, they?re telling investors that sustainability metrics are a full part of their long-term strategy and outlook. Investors are also able to assess the company holistically, beyond the numbers.
Royal DSM?s at-a-glance information on their sustainability efforts alongside their revenue and expenditures.
Sustainability reports, by nature, should tell a story that?s compelling to your investors. ESG is about how your company rises above what?s expected, while increasing revenue and contributing to a greater good. Make sure to tell a memorable story by including profiles of real people who have benefited from your ESG initiatives. Numbers are important, but stories are memorable – always profile people and communities in ways your investors can relate to and remember as they are making investment decisions.
Goldcorp?s highly visual corporate sustainability report includes information on how their activities are impacting communities, people, safety and health, and the environment. Goldcorp presents facts and figures in highly visual ways that investors can digest at a glance. For instance, investors can easily find information on Goldcorp?s decrease in greenhouse gas intensity – the most interesting stat for the socially conscious investor.
Goldcorp?s highly visual sustainability report allows investors to easily digest information.
Goldcorp presents facts and figures in highly visual ways that investors can digest at a glance.
Your IR website?s main function is to show investors who you are. Your ESG initiatives highlight your company?s position as an influencer who can effect change, which ultimately speaks to a future vision that investors will want to know about – and hopefully be a part of.
Find out more about the latest in IR website best practices: keep an eye out on our blog or download our latest whitepaper to learn more about intuitive use, mobile best practices, corporate storytelling, presenting financial information, and corporate social responsibility showcasing.