Takeaways from the 2019 UK IR Society Conference
Citigate Dewe Rogerson was delighted to support the IR Society’s 33rd annual conference held on Tuesday, 18 June 2019 in London.
The President of the Confederation of British Industry, John Allan, started the day with his keynote speech which featured an interesting thought-piece about “who is driving the IR agenda?” Unsurprisingly, discussion throughout the day centred on the rising prominence of ESG-related matters and the effects of MiFID II, with these themes echoing the preliminary findings of Citigate Dewe Rogerson’s 11th Annual Investor Relations Survey.
ESG tops the agenda
Driven by pressure from their own clients and the quest for sustainable returns, investors are increasingly adopting John Elkington’s “triple bottom line” as a performance metric, with the 3 Ps representing People, Planet, and Profit.
However, as buy-side panellists admitted, there is a long way to go towards full integration of ESG considerations into investment processes. They called on companies to approach ESG not just as a risk management exercise but to recognise the opportunities ESG initiatives may offer to reduce costs or increase productivity.
Several interesting questions for the medium term were raised throughout the day, including the possibility of consolidation among the numerous ESG indices to achieve greater standardisation in the manner seen in accounting standards, and the point at which preserving the sustainability of our planet becomes more critical than economic growth.
Consequences of MiFID II more notable 18 months on
Following the implementation of MiFID II in January 2018, IROs continue to see a decline in the number of sell-side analysts following their company and the levels of interaction between brokers and fund managers. It is widely felt that the reduction in maintenance research is having an impact on how market expectations are being formed. With analyst models updated less regularly, they are more often outdated and increasingly contributing to the production of inaccurate consensus.
It is against this backdrop that IROs are allocating more resource to investor targeting, capital markets days and consensus management.
Our preliminary survey findings indicate these trends are particularly acute in the UK, where brokers have historically played a significant part in marketing companies to investors, especially in the small- and mid-cap space.
We look forward to following up on these themes and providing further in-depth insights into investor relations trends when we publish the full findings of our research in September 2019.
For our library of past reports, please see the Investor Relations page of our website.