Should sustainability be a bigger part of your company's online investment case?

There are signs that investors are taking corporate social responsibility reporting more seriously. If this is true, corporate digital teams should consider adding relevant and targeted sustainability material to their investor sections, Jason Sumner says.
 

In the 15 years I’ve been analysing corporate CSR communications – sometimes as a core part of my job and at other times just dipping in and out – the honest answer to the question ‘do investors care about CSR?’ has generally been, ‘not really’.

There were always exceptions, such as in high-impact sectors, but there is evidence that the interest in CSR is widening into the mainstream. It is not that all investors have suddenly joined Greenpeace, but that they are increasingly seeing links between CSR and their traditional concerns about risk, cash flow and hedging; as well as their desire to back innovative new industries and companies:

  • BlackRock, which manages $5.7 trillion in assets, directs all of its analyst teams to take environmental, social and governance (ESG) factors into account when doing research, according to its global macro investment strategist.
  • Tim Koller, a McKinsey partner, says that sustainability concerns are increasingly important to ‘long-term’ investors. ‘When executives sit down with what we call intrinsic investors, the conversation is much deeper and it does focus on what’s material, whether it’s sustainability or other things that are affecting the industry,’ he said in a March 2017 interview.
  • Elisse Walter, the former chair of the US Securities and Exchange Commission, says more mainstream investors are incorporating sustainability factors into their investment decisions. ‘This is no longer a niche activity,’ she writes, and points to a number of statistics to back up her argument, which are here (September issue) if you are interested. 
  • Finally, in our own experience, some US companies who want to attract European investment funds are finding that it is necessary to at least pay lip-service to green issues.

If interest in CSR really is growing among mainstream investors, what does this mean for corporate digital teams and the online channels they manage?

Both Mr Koller and Ms Walter talk about the importance of the ‘story’, moving beyond boilerplate language about sustainability and relating it to investor concerns.

This is the job of IR teams, but it should also be the job of the corporate website, which is, as we often say, the best tool in the world for companies to talk to the outside world. And if your investors really are interested in sustainability, what could corporate websites be doing differently?

Add sustainability to a new or existing ‘investment case’

We advocate creating a section within Investors for the ‘investment case’, on strategy, markets and performance, risk, etc. If you already have one of these, it is a natural fit for CSR factors that might make people more likely to invest. Air Liquide has one of the best of these types of sections.

Apart from being an example of a good website investment case in general, Air Liquide also happens to include sustainability in its pitch to investors. For example, the ‘Key figures’ on the ‘Air Liquide at a glance’ page within Investors include – amongst financial figures – topline data for accident frequency, ‘% of Group sales related to protecting life and preserving the environment’, carbon dioxide emissions, and others.

Air Liquide's online pitch to investors

Air Liquide's online pitch to investors

BASF, another chemical company, has a ‘Sustainable Investments’ sub-section in Investor Relations, where it links sustainability to long-term performance and provides a wealth of evidence backing its claims to be sustainable and why it matters.

The BASF 'Sustainable Investments' sub-section

The BASF 'Sustainable Investments' sub-section

Shell and BP have CSR-focused sub-sections within Investors. Shell’s ‘Environmental, social and governance’ section addresses socially responsible investors (SRI) specifically, and is the only place to read about controversial issues such as its operations in Nigeria.

Shell's ESG sub-section

Shell's ESG sub-section

BP’s SRI sub-section in investors is a rich resource, with presentations, speeches, links to reports.

BP's SRI section

BP's SRI section

Make existing and buried material more prominent

The above companies are in high-impact industries, chemicals and oil, and have a clear and longstanding reasons why they need their websites to prominently tell investors they are also sustainable.

Other companies may be in lower impact industries but still be doing things that investors might care about – supply chain compliance for example. These companies may already be making a link between the investment case and CSR, but in a less overt way than Shell or BP do, perhaps in the CSR report. Consider bringing relevant information currently buried in PDF reports onto the investor section of the website. 

Quick win – put links to the CSR section in the Investor section

Companies often put corporate social responsibility data and stories in silos on their websites – in dedicated sustainability sections that few people visit, or in CSR report PDFs, which probably have even fewer readers.

The conventional wisdom has been that investors and analysts are even less likely to visit these walled gardens than other audience groups because the data tends to be less standardised or relevant to them, and the community stories too fluffy to be of interest.

However, it may not be accurate anymore to assume investors have no interest at all, as separate sections seem to imply. At the very least, consider putting more links to CSR resources investors might find useful – the CSR report, performance data, CSR governance information, etc.

Making the sustainability case for investors opens up a whole new dimension of ‘storytelling’, but one that if targeted and relevant, might just pay for itself many times over the next time BlackRock is looking at your website.

– Jason Sumner