January 23, 2020

 By Ted Ferguson, President, The Delphi Group


One of the most exciting developments in 2019 for a sustainability addict like myself is the emergence of sustainability-focused investor engagement days. I had the pleasure of attending the Algonquin Power/Liberty Utilities sustainability investor day in the fall of 2019. They are a Delphi client and are putting a bold foot forward in demonstrating to investors how sustainability issues are important drivers for enterprise success. I was thrilled to see the strong turnout, engaged mainstream investors, and tough questions. Even more exciting was watching the company’s team of C-suite leaders engage on sustainability issues authentically, and with great depth of knowledge. I encourage others to be so bold in 2020, for three primary reasons.

Firstly, investors are finally taking notice. For years sustainability leads in companies were stymied by Investor Relations departments, who asserted that investors just weren’t interested in environment, social and governance (ESG) issues. When we consider that ESG-related investing is on a major upswing, it is really a missed opportunity if a company isn’t meeting investors where they are at when it comes to their priorities. After all, do you want investors judging your sustainability efforts independently or through a third party, or do you want to control some of that message?  A sustainability-focused investor day deals with this head on. It is a proactive, data-driven account of why sustainability issues matter, and shows how the company in question is engaging on these risks and opportunities to position the enterprise for success.

Secondly, a sustainability-focused investor day is a platform for you to tell your story. Sustainability leads are often teams of one, two, or not many more. Investors, on the other hand, are staffing up on ESG, big time. To date we have seen the big banks and pension funds bring on numerous new team members focused on driving sustainability considerations into investment decisions. The advent of frameworks such as the Task Force on Climate-Related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB) have provided guidance to these teams on specific information and data to look for.

An investor day gives your company the opportunity to engage with investors on these issues in a concentrated, efficient and efficacious way. You will also have the support of your colleagues from Investor Relations, Legal, and other functions given they won’t want you out there speaking all by your lonesome 😊 (and maybe saying something inaccurate….”sure our company is going to be carbon positive by 2021”).

Thirdly, this is about opportunity and differentiation. Now is the time to seize the moment and show how taking sustainability considerations seriously creates value and opportunity. Many key business drivers can be positively influenced by a sustainability focus: brand, reputation, human resources, energy and waste efficiencies, product innovation, community and stakeholder engagement, regulatory good will, costs of capital, and long-term visionary business strategies. Additionally, there is a treasure trove of data available that can be turned into proof points. An investor day needs data, and we’re finally ready to show up with our share of charts and graphs (and footnotes).

Five suggestions for an investor day focused on sustainability

Here are my suggestions for shaping a strong investor day focused on sustainability:

  1. Investor relations is your buddy on this (duh). Bring them in early and get them to be your champions. To help build this alliance, research all your major shareholders and identify the ones who have a strong ESG filter as part of their investment mandate. Then demonstrate how your current sustainability efforts align (wherever they do) with those investor priorities. Invite those investors first, then go to your B-list.
  2. Given most companies with strong sustainability programs have already integrated environmental and social issues into risk management it’s important to leverage this fact to reassure internal gatekeepers that your risk discussions at an investor day will be supported by existing data and information previously vetted internally. Much of it may already be in your financial reporting as well.
  3. Other core sustainability components should be incorporated into the investor day to demonstrate a robust management plan with good breadth. These could include health and safety, HR, compliance, regulatory approvals, and operations.
  4. New business investment, capital decisions, and innovation should also be included. Many of your investors are interested in the future of your organization, and as such you want to be able to show how sustainability considerations are making for a more robust business strategy (hopefully differentiating you from your competitors).
  5. Showcase your sustainability report. All that effort, content and data can be a key resource for the day’s discussions. Focus on the sections that align with investor frameworks such as SASB and the TCFD, and show where you are in alignment with those recommendations.

Ted Ferguson is President of The Delphi Group. For more information about any of Delphi’s service areas (Green EconomyCorporate SustainabilityClimate Change, or Cleantech and Innovation), feel free to reach out to Ted directly at tferguson@delphi.ca