Investor conference ESG focus

Recently Cress Consulting attended the Australian Investor Relations Association (AIRA) annual conference. The event focused on enhancing sustainable growth in investor relations, with a full day of panel discussions unpacking market challenges and trends. The rise of ESG reporting featured prominently throughout the conference, with nearly every panellist offering expertise on the matter. The conference was a fantastic opportunity to hear a wide range of opinions on the inflation of investor expectations, and could not have been more timely for both Cress and our Alliance partners Collier Creative and Morell & Co. As we continue to deliver expert ESG reporting services, it is crucial that we keep abreast of the rapidly changing reporting environment.

The speed of Australian legislative change concerning ESG reporting was a key theme throughout AIRA’s conference. As domestic laws and regulations catch up with those in the EU over the next 5 years, the accuracy and efficacy of continuous disclosure has never been more important. Businesses must avoid being regulated into ESG, lest they find themselves playing catch up with competitors and having lost investor interest.

So, what makes a good ESG report? Multiple speakers underlined the importance of demonstrating that ESG is integrated into core operational and risk management – “Do first, report second”, said one of the panellists. An ESG report needs to demonstrate honesty to investors over who your business is, where its value lies, and convey a clear narrative of shared value within the community. Investors’ expectation of more sophisticated information calls for strong ESG reports to demonstrate a broad suite of topics. These include ambition, short, medium, and long term targets, clear baselines, details of CapEx, internal resourcing, board involvement, collaboration with peers, lobbying & advocacy, carbon price risk management, and offsetting. A key takeaway from the event was the potential for ESG to foster the creation of enterprise value, and that just because something has no materiality to profit, doesn’t mean it’s not material to the value of the business.

The conference summarised three key challenges facing investor relations professionals in the next 5 years. First, the amount and availability of information will challenge businesses to collate and synthesise more data for investors. Ensuring this information is contextualised with a clear and transparent narrative poses a significant challenge. Secondly, the communication of the necessity of climate change adaptation will need to underpin many firms’ ESG reports. Doing this while keeping the interest of all types of investors will not be easy. Lastly is the increased scrutiny from all stakeholders. The magnifying glass has never been closer, particularly to listed companies, and the bar is rising.

If you would like to learn more about ESG Reporting, follow this link.

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