The triple bottom line – people, planet, and profit – has been an ethical standard for doing business for years. And the three P’s, which take into account a business’s commitment to environmental, social, and corporate (ESG) governance, are more relevant than ever. For example, the three P’s were a major focus of discussion at the recently conducted IR Society 2019 Annual Conference. At a time when socially responsible investing is hotter than ever, respecting the power of the three P’s is not only the right thing to do but the sensible thing to do for businesses.
An Agenda with Urgency
The 2019 Annual Conference took place at a time of heightened and increasingly urgent interest in sustainability. As we discussed on our blog during European Sustainability Week, businesses are under pressure to put aside their competitive differences and rally around the future of planet Earth, especially after the Intergovernmental Panel on Climate Change said that the world has about 12 years to contain global warming or face catastrophic results.
The sense of urgency was felt at the IR Society Annual Conference, attended by many of us at Investis Digital. ESG dominated discussions among investor relations professionals as they steer businesses away from a focus on “profit, profit, profit” and toward themes such as sustainability and doing social good. And we should not be surprised. IR is now a proving ground for the major issues shaping how business operate because businesses can more effectively measure the impact of their actions on the bottom line. ESG is becoming an increasingly important factor in investment decisions. Companies that embody ESG into their core business model (rather than see it as a tick-box exercise) are actually starting to outperform competitors financially (as well elevating their public appearance).
Investors Seek Sustainability
At the same time, existing long-term shareholders of an equity are unlikely to dump stock purely based on ESG factors (unless the company is extremely lacking), and high-volume traders are less likely to pay attention as they are not invested for the long-run. This leaves the smaller proportion of new long term/passive investors as the primary audience for ESG (alongside talent). And those investors are receptive: especially as more millennials and Gen Z come of age, investors increasingly want businesses to demonstrate sustainable practices.
Businesses face a major challenge: not only do they need to practice sustainability, but they also need to share how they’re doing it. To attract a newer generation of investors, IR professionals need to ramp up their ability to create a strong narrative about how their businesses are creating a sustainable future. Some bellwether brands such as Procter & Gamble have perfected the art of sharing a sustainability narrative by combining powerful PR with effective websites. These companies know that by talking about their efforts to be sustainable, they not only meet the needs of shareholders, customers, and employees, they also encourage other businesses.
What IR Executives Should Do
At the IR Society Annual Conference, we sensed that many IR professionals need help unlocking their sustainability stories. At Investis Digital, we regularly analyze and score corporate brands on how well they’re leveraging their ESG/CSR story digitally. We combine strategic insight with original ideas to create a sustainability narrative that’s relevant and compelling for all your audiences. We suggest assessing your corporate brand to better understand gaps and opportunities around leveraging your story to drive business impact. Contact us to learn more.