"...corporate reporting is not just about compliance but a strategic tool that can significantly impact a company's reputation and investment prospects"
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As we approach the end of the year, we have been drawing insights from sell-side investors with a view towards uncovering actionable recommendations that can help shape our clients’ reputation and investment outlook.
In this blog, we delve into five key insights from sell-side investors, illuminating the importance of corporate reporting in connecting companies with investors.
1. Prioritising value-add reporting
2. Navigating the energy transition
3. Crafting an equity story
4. Clarity and conciseness in disclosures
5. ESG considerations
When making an investment decision, 74% of investors critically analyse how a company manages ESG risks and opportunities. Having strong ESG communications can help your company stand out to investors. These are key things investors are looking for:
- Proactive ESG engagement: Companies should have a forward-looking ESG strategy so they can proactively address future ESG issues rather than reacting to them.
- Governance matters: Governance is the foundation of good business practice, in which effective governance disclosures are growing in importance. Sell-side investors are looking for greater detail around board skills, diversity, social and environmental activities, approach to audit and the effectiveness of the board.
- Comprehensive reporting: Some companies might not be obligated to report on specific ESG factors, but failing to do so can affect their ESG ratings and visibility to the sell-side. Reporting against a wider range of ESG ratings can help cast a wider net of sell-side investors, as different investors use different ESG rating criteria when evaluating prospective investments.
- Data accuracy: Ensuring the accuracy of data incorporated into ESG indices is paramount for companies looking to enhance their sustainability practices and attract responsible investments. As regulations demand greater comparability in data points, having credible data is essential. Improving the overall standards of data collection and assurance increases the reliability of ESG data when it comes to investment decision making.
Ever Sustainable are specialists in helping companies develop multi-pillar, actionable and reportable ESG strategies as well as help them understand the world of ratings and what they can do to improve their performance.
In conclusion, corporate reporting is not just about compliance but a strategic tool that can significantly impact a company's reputation and investment prospects. Embracing these insights from the sell-side can help companies navigate the complexities of ESG reporting, foster productive dialogues with investors and ultimately enhance their position in the market. Staying ahead in this ever-evolving landscape is crucial for companies aiming for long-term success.
Design Portfolio can help your business adopt these recommendations. Design Portfolio advises on corporate communications and sustainability strategies to ensure businesses are effectively communicating to their stakeholders.