As a reformed banker, I tend to be alert whenever I hear folks talking about investment and investors. Over the past few Sustainable Brands events, I’ve noticed, however, that the language can sometimes be a bit muddled around this topic. Investors are often lumped into one homogenous bunch, whose needs and duties are not really understood. The differences between the types of investment product and the accompanying financial risk-reward can be confused. And at its most extreme is the proclamation that investor group X “should” do something — which is usually code for “invest in companies like ours”!
When I stopped to think about it, though, it’s perfectly reasonable that the average sustainability professional would have limited understanding of international financial markets. Which is why I thought it might be helpful to put together a brief video explanation of the different primary actors for whom the “investor” tag is used, what they are trying to achieve and why they might be of interest to you — and vice versa.
Talking of which, the relevance of all this to our work with the Future-Fit Business Benchmark is that we want these different groups of investors to be engaging with future-fitness in two key ways. The first is to use the Benchmark to inform their engagement with companies: what lens they should apply when seeking to understand how well companies are preparing for systemic risks and emerging opportunities, and what issues to raise with the leaders of those companies. The second is to use the data that companies will, in time, self-report regarding their progress towards future-fitness, in order to inform investment decisions. Both of these are, by their very nature, a symbiotic relationship between the company and its investors — with Future-Fit offering a focal point for discussions about extra-financial priorities, problems and progress.
All of which brings us back to this video. Our hope is that the better you understand the providers of capital to your company, the more you can do to get them interested in the work your team is doing. There is obviously a limited amount that can be covered in a short video, so this is a very high-level introduction. However, if you find it helpful, please let me know: If demand is sufficiently high, perhaps we can follow it up with a series of video conversations with leaders in each investment sector to dig into more detail.
From TCFD, to shareholder activism, to transparency gaps ...
Join SASB, CDP, EY and HIP Investor for an overview of the constantly evolving investor relations landscape at SB'19 Detroit — June 3-6.
Drop me an email if you would find this useful, or if you have any other comments. And if I don’t hear anything, I’ll take the hint …