In 2023’s rapidly changing business landscape, companies face increasing pressure to demonstrate their commitment to environmental, social, and governance (ESG) principles. Today, incorporating ESG into your investor relations strategy is no longer an option—it’s essential to your success.
Your company’s ESG performance has become a serious factor behind the decisions of investors whether or not to put their hard-earned money behind your ventures—not to mention become a cornerstone element for some portfolio managers considering your inclusion.
Even debt becomes more expensive for companies with poor ESG: Bank of America Merill Lynch found that “the cost of debt for S&P 500 companies with the highest ESG ratings can be nearly two percentage points lower than those with the lowest ratings,” according to Inspir Group.
But it’s worth noting that excellent ESG performance alone won’t maximize your results in the market. ESG needs to become a part of your company’s articulation of its own value proposition, directly part of your IR strategy.
Basically, prospective and existing investors won’t understand your ESG efforts unless you tell them.
The key is your ESG page
Perhaps the simplest way to highlight your ESG efforts to the market is through a dedicated ESG landing page or section on your site. The more information you provide the better: outline your approach to ESG in detail, explaining how your company incorporates progressive policies into its work.
Sections on your company’s environmental policy, your policy toward health and safety, and (for companies in resource extraction industries) indigenous relations will build trust with investors. The copy should go beyond lip service to show an actual position your company takes on these matters.
The page also needs to be attractive. In the same way that your homepage is the first impression most investors will have of your company, your ESG page is the investor’s first look at your sustainability efforts. Therefore, it should follow the same design principles as the rest of your site, putting your best foot forward from the start. For inspiration, look at Worthington Industries‘ ESG page—it’s well-designed, intuitive, and tells an important story about a company ranked #1 in ESG by Investor’s Business Daily.
On the page, include regular ESG reports focused on key performance indicators and/or concrete goals your company seeks to accomplish. For example, mining company Fortescue Metals, considered one of the top mining companies for ESG, includes “sustainability performance” metrics on its ESG page, such as its Aboriginal employment rate, dollars invested into local communities, and investment into environmental baseline studies.
What if you don’t have much ESG content to share?
Of course, many small- to mid-cap companies won’t have so much content to put on their ESG pages. That doesn’t mean they shouldn’t have one.
In 2023, you must have some kind of ESG perspective that you can share. For newer or smaller companies that don’t have a wealth of items to share, a big, bold page with clear calls to action may be enough.
You can then build from there, incorporating your company’s further ESG efforts into your messaging as your position becomes clearer.
Stay accountable, and keep updating your policies
Investors can tell if your ESG strategy is flimsy, or just words. Empower your governance structures to ensure accountability for ESG initiatives.
But do understand that the world’s attitude toward ESG is constantly evolving. Make regular reviews and updates for your governance policies and practices to stay abreast of the latest trends, and communicate these shifts to stakeholders.
A robust ESG framework makes your company a better corporate citizen, something that is not only the responsibility of any modern business but is often rewarded in the market. It’s yet another opportunity to create value for your company and your stakeholders—make sure it’s a core consideration in any IR work
BLENDER can help elevate your ESG page
BLENDER is an expert at creating stellar ESG pages for companies from all industries. We have a keen understanding of what works in the market, and how to build pages that get investors’ attention. If you’re interested in building a better ESG presence on your site, contact us, and let’s get in touch.