As ESG investing continues to explode and the digital transformation of capital markets communication continues to accelerate, IROs are facing increasing pressure to develop and articulate their ESG strategies in the virtual environment. A dedicated ESG website is a great way to start. You can demonstrate where your focus is, reinforcing your mission and your strategy. It’s where you should be promoting your agenda.
Getting started can seem overwhelming, from what information to provide to how to display it. But even though there’s no ‘one-size-fits-all’ in terms of the ESG information on your website, there are some best practices. At Q4, we believe it’s really about clearly presenting what matters most to your key stakeholders and owners. Depending on your size, industry, and geographic location, this could mean any combination of things.
Beginning your ESG Website Journey
If you’re just starting on your ESG journey, it’s OK, to begin with content based on what you have today or your current approach. As your ESG knowledge and reporting grow, so can your website. Evolution is the key.
And, as large-scale patterns begin to emerge regarding what information and disclosures are typically shared, you can consider the value of each when beginning to tell your ESG story:
- Statement about your strategy and/or commitment
- Message from your CEO
- Performance metrics
- Your key values
- Blogs or other writing on the matter
- Your reports and disclosures
ESG Website in Context
Remember, context matters as much as the data itself. In a recent publication, SASB shared their learnings regarding trends in investor feedback on disclosure quality, format, and decision-usefulness. Q4 believes that applying these top 5 to your ESG website is a best practice:
- Context: It is most useful when companies not only disclose performance data, but also explain how the business is managing the associated topics as business opportunities and risks.
- Focus: Separating investor-relevant content from content that is relevant to other stakeholders makes it easier for investors to find and use the most useful information.
- Convenience: Most reports included a table of SASB metrics, but those with contextual data provided alongside the metric are easier to use than those that referred to a page number.
- Reliability: When companies included a third-party assurance report, the investor participants took notice and provided praise.
- Authenticity: Investors appreciate reports that aren’t overly wordy or self-serving but rather are matter-of-fact about the challenges the company and the industry face.
And while having a dedicated ESG website or even having ESG information on your IR website is an excellent start, how you present that information also matters. As John Nunziati, Associate Vice President of IR Professional Services in Client Success, suggests, “the audience for ESG information is investors, so it should be easy for them to find [the most important] ESG information about your company [in a reliable and predictable manner].” In fact, 72% of investors surveyed by EY shared that they conduct a structured, methodical evaluation of a company’s ESG criteria.
Structure of an ESG Website
From a technology perspective, this has come to mean the ‘scraping’ of websites for pertinent ESG information. By creating structured and standardized methods for communicating environmental, social, and governance initiatives, IROs can ensure investors easily understand their impact, while investors can more effectively curate, consume and compare that data. If your website is not laid out properly or your reports and disclosures are not in the correct format, this could negatively impact your ESG rating.
Several years ago, the Q4 team began to recognize the growing importance of ESG to the capital markets community. We began collaborating closely with IRO clients to decipher how best to represent their ESG strategy and activity in the digital environment. It quickly became clear to Jeyson Lopez, Manager of Digital Design, that “clients were struggling on how to tell their story. They didn’t know what to include, what content should be promoted, and how to leverage design to elevate their ESG story.”
Simone Pereira, Q4’s Senior Product Manager, comments that throughout her conversations, “clients across North America were continually asking me what have we [Q4] learned speaking to others and what are the best practices that we are seeing?” There was an immense appetite for understanding how to bring ESG to a website more effectively.
Simone, in partnership with Samantha Howes, Q4’s Senior Product Designer, began reviewing various websites to assess what information was presented, what content was emphasized, and what content types were used. In particular, Simone and Samantha focused on how public companies had been approaching sustainability on digital platforms and turning significant quantitative assessments of non-financial strategies into visual narratives. “Through our reviews of clients and non-clients alike, we began to assess the information architecture to see how content could be presented from text to PDF, to imagery carousels, to multimedia,” says Samantha.
Essentials of ESG
While it is clear that there is a huge variance in the way companies are both thinking about and communicating their ESG strategies, Q4 believes that a “unifying and structured digital experience for investors is paramount to helping [investors] to better find information that they need,” says Simone Pereira. “If I, as an investor, can come to a page and know where to look for that content, it can help in consuming that story and in making the right investment decision.”
A consistent approach to how ESG information is presented on a website can significantly help companies that are bringing their story to a broader audience by ensuring that they are disclosing the right data, while also making it easy for investors to find the information critical to their assessment.