COVID-19 driving step change in investor focus on ESG
67% of companies in Citigate Dewe Rogerson’s 12th Annual Investor Relations Survey report increased investor interest in social issues
Survey highlights increased investor focus and board level discussion of social issues and a marked European-North American divide in ESG reporting and investor interest
Despite the short-term emphasis on financial resilience and viability following the global breakout of COVID-19, new research from Citigate Dewe Rogerson’s Investor Relations Practice shows the pandemic is accelerating the long-term shift towards sustainable investing with 73% of companies expecting it to bring increased investor focus on non-financial performance metrics over the next 12 months.
Nearly 80% of companies in Citigate Dewe Rogerson’s 12th Annual IR Survey report an increase in ESG-related questions from investors, with 27% reporting a significant increase in such questions. Despite some North American investors becoming increasingly vocal on the importance of ESG, the findings highlight a continuing marked divide between Europe and North America in the level of investor interest. While 34% of companies in Europe reported seeing a significant increase in ESG questions over the past year (UK: 40%), in North America that figure was only 10%.
The current crisis and widespread social unrest have highlighted the importance of social issues in particular, with 67% of companies reporting increased investor focus on issues including diversity, data protection and privacy, employee engagement, labour standards, and human rights. 24% of companies now include social issues on every board agenda, ahead of environmental issues at 20%.
In response to these trends, 64% of investor relations teams intend to improve ESG disclosure over the coming year, up from 47% twelve months ago.
The survey findings also show growing pressure for companies to enhance board oversight of ESG performance. 37% of companies questioned have now formed a Sustainability Committee, while 43% state that at least one of their board members has experience in managing ESG issues.
Commenting on the findings, Sandra Novakov, Head of Investor Relations at Citigate Dewe Rogerson, said: “Rather than putting ESG issues on the back burner, the COVID-19 pandemic has accelerated the long-term shift towards sustainable investing, particularly outside North America. As institutions take a deeper, more qualitative, analytical approach to investment decisions, demand for greater transparency, engagement and oversight with respect to ESG issues will undoubtedly grow further still.
“This is a critical time for listed companies, many of which are dealing with a myriad of challenges at present. Those which see the clear risks and opportunities presented by current trends, however, are pushing ahead with their ESG agenda, looking to enhance their narrative and leverage ESG accomplishments to achieve differentiation from their investment peers.”
Citigate Dewe Rogerson’s 12th Annual IR Survey incorporates feedback from 377 Investor Relations Officers (IROs) at leading companies across the world and is now available to download here.
Efforts by IROs to enhance ESG reporting and engagement, particularly outside North America, are also evident across the research findings:
For further information, please contact:
Head of Investor Relations
Citigate Dewe Rogerson
Tel: +44 (0)20 3926 8517
About the Survey
Citigate Dewe Rogerson first started investigating trends in investor relations in 2009 to gain insight into how companies were adapting to the uncertain times brought about by the 2008 financial crisis. Our first survey was based on responses from 80 IROs representing companies from a wide range of European markets, sectors and company size. Since then, our annual IR survey has gained a growing number of supporters, not least from IR societies across Europe including the UK IR Society, Germany’s Deutscher Investor Relations Verband (‘DIRK’) and the IR Club. This led to a decision to include companies outside of Europe in the research for the first time in 2016. In 2020, 377 IROs from leading companies across the world participated in the survey to provide comprehensive insight into how reporting and investor engagement are changing in response to COVID-19 and the rising importance of ESG.
About Citigate Dewe Rogerson
Founded in 1969, Citigate Dewe Rogerson is one of the most respected names in strategic financial and corporate communications. Our dedicated investor relations practice has a track record of 30 years in advising boards, senior executives and IROs worldwide to build their profiles amongst the investment community and nurture relationships with key decision makers.