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How To Run A Successful ESG Investor Day

Monday, 13 July 2020

Companies have traditionally run Capital Market Days (CMD) as a way for senior management to meet investors, in a slightly more relaxed approach, to talk about the broader direction of travel of the business in terms of strategy. The CMD format is an efficient way for issuers to provide context to their financial statements and other investor marketing materials while giving investors access to key people in their organisations, including senior operational managers. 

In more recent years, equity issuers have expanded this approach to run "governance roadshows", organised by the Company Secretary and/or the Investor Relations Officer, where the Chairman and other relevant parties will meet with the governance teams at the major investors ahead of the AGM. Currently, these roadshows have only been actioned by a minority of issuers in the UK and have tended to favour the larger investors only, due to time and resource constraints. 

But the importance of Environmental & Social Governance (ESG) issues in terms of the valuation of companies by the market has increased significantly, especially during the pandemic crisis. This focus allows companies to expand and intensify the distribution of their ESG story to investors, especially where they have a good story to tell. 

Introducing ESG Investor Days  

A more time-efficient and broader investor distribution route would be to consider an ESG version of the CMD. We call these ESG Investor Days, though, in reality, a meeting of a couple of hours would suffice in the online environment. Before the pandemic, many larger issuers had started to run these events as physical meetings, encouraged by investors directly and indirectly via The Investor Forum, the body that represents a large swathe of the UK institutional investor market. However, given the increased importance of ESG to both active and passive investors, as a result of the pandemic, it is now time for all equity issuers to consider running these events. 

How to run an ESG Investor Day 

A typical ESG Investor Day meeting is attended by at least two of the following corporate functions: Chairman, Company Secretary, Head of Investor Relations, Senior Independent Director and any dedicated ESG or CSR team members at the company. Given that investors will probably be meeting the senior management regularly at the non-deal roadshows, and operational management at the CMDs, it is more useful for investors to meet the other parties at the ESG event. Indeed, many investors will specifically want to meet the people listed above without the CEO and CFO being present to be able to ascertain how well the Board considers ESG issues outside the influence of the executive management. 

The typical content of the Day would include presentations on the following areas: 

  • Corporate strategy 
  • Specific ESG issues pertinent to the company 
  • Board composition and succession 
  • Remuneration and how that is linked back to the strategy in terms of performance. 

Attendees would typically include all current ESG-specific buyside portfolio managers and analysts at current and major target investors. Still, there is no harm in inviting non-ESG-specific major investors as many of these portfolio managers are interested in ESG, especially concerning sustainability. 

Running an ESG Investor Day during COVID-19

As we still find ourselves unable to host physical events, it is essential to note that your ESG Investor Day can easily be held online. You'll need to consider the right platform carefully and the length of the meeting to ensure your audience remains engaged. 

Helping to get you started 

RD:IR from EQ can help you in the construction of these Days in the following ways: 

  • Identifying the level of influence of ESG investors have over your share register
  • Creating and managing event invitation lists of relevant contacts at investors and targets
  • Running pre-meeting surveys of investors and targets to identify which topics investors would like the event to cover
  • Providing general guidance on meeting content
  • Encouraging attendance at the event by investors
  • Running feedback surveys of investor views on the event with recommendations for future events 

It may be helpful for the Boudicca from EQ team to run a pre-meeting analysis of your current governance status and your ESG reporting for you to understand the challenges and opportunities you face in terms of constructing your ESG story for the event. 

For many companies, ahead of all of this, the first step to creating an ESG Investor Day is to construct and produce a corporate ESG strategy which is "baked in" to Board thinking. Planning the Day can help actualise Board thinking around ESG by providing a deadline to work towards. 

ESG Investor Days may have been a minority pursuit until now, but, they will become a standard part of the corporate calendar as investors become more demanding of issuers, we're here to help you get the important details just right.