Connecting Investor Relations officers and CSR officers = IR+CSR
How many ways may we successfully present the ESG factors in the sustainability investment case? Finding numbers for the cost/benefit of sustainability is perhaps less fashionable than in 2007, but presenting the investment case â the sum of all business cases at a point in time â remains an unpracticed role of sustainability practitioners and CSR departments. It is something that several organizations have tried to raise and move the agenda forward on. While at UNPEFI for the PRI we helped engage stakeholders in a pilot session at the Lloyds Building in LDN back in January 2008 (see reference PDF), pulling in mainstream money managers, SRI managers, company C-level types and regular CSR professionals. Partly on the basis of that work WBCSD Business Role team then conducted several more interactions, including the investor stakeholder session In Kuala Lumpur I was able to facilitate around the first ever CSR/SRI conference in Malaysia co-hosted by Geoff Williams and his OWW from Singapore, again in 2009.
Later in the project as advisor we had the final in the run of sessions in Johannesburg at the WBCSD annual event just 200m down Gwen Lane from the Johannesburg Stock Exchange, the largest in Africa and 17th largest in the world (see the Background paper we co-wrote wth Cheryl Hicks). What struck then as now is the varied approaches to sustainability and CSR strategy, and so the differences in relationships between the CSR/ESG line function and how the firmâs investors â whether listed or unlisted securities â ever came to know about it. It is fair to say that major investment presentations seldom cover ESG factors, unless the Black Swan happens (low probability, high impact negative event), and management scrambles to correct a problem. When colleagues in the JustMeans community like Dave Stangis at Campbells in Camden NJ started chatting about how they may write their 2008/9 sustainability reports, the first question is âto whomâ? While investor readership may be small, writing for the investor is an important discipline, and necessarily improves the rigour of the report: investors want the hard facts (both good and bad) and visibility on future earnings, as well as comparability with what stories have been told before.
While enjoying a run along the Atlantic seafront in Cape Town on a warm, blue sky Saturday. before making the long journey by plane and train to TÃ¤llberg in northern Sweden on Sunday/Monday, I discussed this apparent gap between CSR practitioners and the Investor Relations function, and the trickle effect on ESG factors into investment coverage. It is an area that deserves more organizational behaviour inquiry, especially in 2009 when the sustainability business case is stress-tested against the cost-cutting context. CSR Europe did putout a solid reporting covering issues in 2008. In one positive example in emerging markets where firms have a strong implicit sense of social responsibility and are sensitive to (foreign) investor perceptions of good governance, I was pleased to learn that the sustainability head reports directly to the IR person at premium retail firm in South Africa, Woolworths , has the lead of Woolworths Good Journey, the Woolworths sustainability strategy embedded into their value proposition . Keeping whatever CSR is happening within a firm close to what the customer wants is the better approach when writing this yearâs sustainability report, or thinking about the Corporate Sustainability Officer role (read more in Forbes; SRI-Extra). And that helps investors understand what is good for the firmâs future.