As we all know investors hold a huge power over an organization's direction and decisions made. Out of the four most powerful stakeholders including Customers, employees, and regulators, I think investors and shareholders are the most powerful and this is why as Environmental, Social, Governance (ESG) technical and communications specialists we need to fully understand what our investors are expecting from our organizations.
Before designing our clients’ ESG business model integration and communication strategy I ask to meet with some of the investors to capture their thoughts on ESG and how it can be rolled out within the organization.
You would be surprised how knowledgeable they are in this field and how clear their vision on where ESG should fit within the organization. After all its their money we are working with.
Below are some interesting data I collated on ESG, and investor behaviour and they differ from financial professionals who invest our money on our behalf.
From the below graph its clear that individual investors who care the most about ESG are based in Colombia, Chile, Italy and Hongkong however, it is Europe and south America that are leading the way when it comes to having this people and planet mindset. I am not surprised with this findings as these two continents are the leaders in ESG regulation and they are driving the global people and planet agenda.
But we all know that ESG is not easily measured, and the global standards are yet to be designed hence its very difficult for us as communication professionals and ESG technical experts to compare our performance against our peers or industry.
Therefore, I advise our clients not to implement an ESG activity because it’s a trend and rather examine their business model, their values, their purpose and the budget they would like to allocate before jumping on the Trend Wagon.
From the below graph it is clear that investors depend on Third Party ratings along with reports from the companies and NGOs but what’s interesting for me is the fact that they also depend on News and media which falls under our remit as communications professionals, and which puts pressure on us to upskill ourselves on the topic and ensure that our messages are the accurate ones.
Its not a surprise that most of Tomorrow’s investors are Millennials and GenZ and even though their investment assets are currently low we must not ignore the fact that soon they will grow. From the below graph its clear that the alignment of personal values and investment opportunities are linked even with the baby boomers.
When communicating your fund raise, or meeting with investors on roadshows make sure you research their values first and then integrate it within your pitch.