Take control of SRI/ESG investor communications

The three broad investor groups that are likely to be of most immediate interest to companies are:

‘Buy-side’ asset managers

‘Buy-side asset managers’ are investment institutions that buy, hold and sell the shares of companies in portfolios on behalf of beneficiaries.  Within these institutions, any of the following roles may show an interest in a company’s sustainability performance: specialist SRI analysts, specialist SRI portfolio managers, ‘mainstream’ financial analysts, ‘mainstream’ portfolio managers.  Clearly the former categories are likely to be most interested – but the latter groups should not be ruled out.

SRI research providers

SRI research providers include:

• SRI Agencies – that have, over 20 years, provided the specialist sustainability data and company ratings required by asset managers.  There is a number of specialist sustainability research and ratings agencies who channel information about and produce analysis on companies’ sustainability performance for the ‘buy-side’ investors.  Although they do not invest directly themselves, they have influence (in varying amounts) over the ‘buy-side’ asset managers through the research reports that they write and the ‘ratings’ that they issue.
• Sell-Side Brokers – that have progressively extended their investment research offer to incorporate sustainability considerations and now fulfill two important functions:
  • They analyse companies’ sustainability activities and make investment recommendations
  • They act as a bridge (a broker) between the companies and investors – facilitating improved information and contact.
• Financial news and data agencies – that have recently added specialist SRI-wrappers to their news and data product offers;
• Credit rating agencies 
• Investor Coalitions – that collaborate on research projects that form the background to active engagement with companies;
• Independent research companies – that conduct sustainability-related research for investment and other markets – but are not specialist SRI agencies

To assist their dealings with these research organisations, companies should expect to have a single point of contact to raise any questions or points of concern with.  They should also expect to receive a copy of any research published about them – at point of publication.

Asset owners

An increasing number of asset owners are publicly assuming responsibility for the environmental and social impacts of the companies that they own.

• In some cases, they delegate this responsibility to their appointed asset manager;
• In some cases, they delegate the responsibility to a third party;
• In some cases, however, they retain these responsibilities themselves and take whatever action is necessary to discharge them.