ESG expectations and standards have changed everything. How profound is the impact of ESG on investment decisions? Any public company has myriad stakeholders; isn’t the real issue the relevance and impact of ESG on value creation? And what is the role of the chief communications officer in all this?
- Michelle Edkins, Managing Director, Global Head of Investment Stewardship, BlackRock
- Linda-Eling Lee, Global Head of Research, ESG Research Group, MSCI
- Kristina Joss, Head of Strategy, Salterbaxter North America
- John Vaske, Joint Head, North America, Temasek
- Kyung-Ah Park, Managing Director, Head of Environmental Markets, Goldman Sachs (Moderator)
“In the early days of this journey, many considered ESG concessionary, such as taking out investments that don’t ally with your values such as guns or tobacco. Today it’s a way to more effectively manage risks and opportunity. Companies that manage ESG are more resilient to risk and sustainability in the competitive landscape, and deliver long-term shareholder value.” – Park
Panelist companies are engaged in various aspects of ESG investing:
“BlackRock is a fiduciary investor; we only invest for our clients … What we focus on is companies’ ability to deliver long-term value to shareholders, and social impact does impact their sustainable business performance.” – Edkins
“MSCI is known for being index provider and my role is research for ESG division … The inputs we use tend to be public sources like government and academic databases, and we get a lot of information from your websites.” – Lee
“We are a sustainability agency advising companies on purpose, setting up the vision, goals, targets and everything that’s operational.” – Joss
“We are an independent investment company owned by Government of Singapore, but we don’t act at the discretion of the government … ESG has been part and parcel of our mandate since day one, and we are putting more of a framework around it now.” – Vaske
Implications for communicators:
- Language and terminology: ESG is one term, but it’s not universal or always understood the same way. Communications should be active in developing the common lexicon internally and externally.
- Quality content: Investors are looking for strategy and context, not just data.
- Machine-learning and AI: The first round of intelligence about a company is coming through technology, with humans then filling in the gaps. Given the organization’s lack of control over this global information, it’s more important than ever to provide compelling, relevant details across multiple channels.
- It’s not about perfection: Companies want to tell a flawless story, but it’s more important to show and talk about movement towards goals than to wait for perfection. Ongoing engagement has better long-term benefits.
In their own words:
“Sustainability teams understand that gone are the days of the 100-page report that was supposed to speak to everyone. How you engage with investors is much different than other stakeholders.”
“It is important that companies tell their stories, with data, and also with the strategic imperatives for what you’re doing. The train is leaving the station, you need to get on it.”
“This is an evolving journey, there’s nothing static about this. If your company doesn’t look perfectly compliant in all directions, communicate about it.”
“As communicators, you have a key role to play in joining the dots for investors. Things that look obvious to you might not from the outside.”