IRRI: Capital Naturally – Alignment

“A review of how companies communicate to investors on sustainability factors and their alignment of these with key value drivers of their business.

To improve the effectiveness of their sustainability communications with investors, we find that companies should:

Identify which of their investors (and the analysts that cover their stock) are genuinely interested in integrating sustainability factors into fundamental bottom-up valuation. (Note: it is fewer than those that SAY they are ‘doing ESG integration’)
When preparing presentations for specialist sustainability-orientated investors, ensure that these reference the key value drivers of your business
When preparing presentations for ‘mainstream’ investors and analysts, use a ‘materiality matrix’ to open a discussion around your firm’s most significant sustainability exposures and the way that you manage these
Iterate these presentations towards greater integration through sustainability and mainstream roadshows and webinars over the coming years”