Article_three_photo.jpgResearch reveals opportnity to engage investors on long-term value creation

Corporate Citizenship has recently released the highly anticipated investor relations report ‘Getting on the right track: How to demonstrate the value of sustainable business to investors.

The report identifies a framework for improving communication between investor relations (IR) and corporate responsibility (CR) teams, and between business and investors. It forms part of the launch of The Long Term Value Project, a new initiative of Corporate Citizenship which looks to bridge the gap between IR and CR.

 Results indicate a growing number of investors are looking for high quality information on a company’s sustainability performance. Earlier this year Larry Fink, CEO of Blackrock, United Kingdom called on S&P 500 CEOs to demonstrate how environmental, social and governance (ESG) factors contribute to long-term commercial success.

New research, in association with S&P Dow Jones Indices, reveals that long-term thinking is still not the norm for many business. Insights included:

  • Over one quarter (26%) of companies studied made no reference to long-term value creation in their external reporting to investors
  • For almost three quarters (74%) of companies that did not mention long-term value, many struggle to articulate the importance of ESG factors for long-term business success
  • However, 100% of integrated reporters analysed made relevant mentions of long term value creation.

Based on research and interviews with industry experts, the study identifies two disconnects that need to be overcome to enable more companies to demonstrate a link between ESG performance and long-term commercial success:

The internal disconnect between IR and CR teams means many companies find it difficult to define, measure and communicate ESG performance.

The external disconnect between companies and their investors resulting in a lack of alignment on the material ESG factors between both parties means there is a very limited disclosure of these issues in traditional corporate communications to investors.

The report identifies a framework for improvement on how companies can bridge these two disconnects through a series of practical options. It forms part of the launch of The Long Term Value Project, a new initiative by Corporate Citizenship looking to bridge the gap between IR and CR.

Simon J Robinson, LBG Director, said, “The ‘S’ of ‘ESG’ is LBG territory, effectively measuring the social contributions a company makes is core to creating long-term value for a company. By knowing the difference made by corporate contributions a company can make more informed decisions and by sharing that story the full value can be realised. Without measurement this value is lost. LBG data can and should be used by IR.”

The report entitled ‘Getting on the Right Track: How to Demonstrate the Value of Sustainable Business to Investors’ can be downloaded here

FAST FACT

  • In 2016 our members contributed $236M to the community and 0.14% of total revenue on average

     

  • LBG members have
    an average of
    4 full time staff
    members dedicated
    to community
    investment activities

  • LBG members on average contributed 0.56% of pre-tax profit to the community in 2016

  • In 2016 our members contributed $831 per employee on average

  • Employee time made up 10% of contributions by our members in 2016

  • Social Welfare causes received the majority of member contributions in 2016

  • In 2016 on average 11 hours per employee was contributed to the community

MEMBER SPOTLIGHT

  • Jawun.jpgLBG members NAB, Woodside Energy & Wesfarmers support employees on five week secondments assisting Indigenous organisations with economic and social development projects.

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  • ANZ_case_study.jpg "Seeds of Renewal" is a grants program, supported by ANZ, which aims to contribute to building thriving communities in regional Australia.

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  • TUK.pngDatacom helps make the internet safer for kids through ThinkUKnow, an internet safety program delivering interactive training to parents, carers and teachers.

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  • Essendon_EFC_Dyson_Heppell_and_Friends.jpgThe Essendon Football Club aims to strengthen communities through sport, and a key partnership is with the Tiwi Bombers Football Club located 80 kilometres North of Darwin. 

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  • Heart_Foundation_photo_small.jpgThe Medibank Community Fund and Heart Foundation partnership was born out of a shared 'For Better Health' philosophy to encourage healthy eating, more physical activity and greater community connectedness.

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  • National_Gallery_Ab_art_062.jpgIn 2009, the National Gallery of Australia and Wesfarmers Limited established the Wesfarmers Arts Indigenous Fellowship program 

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  • Optus_casestudy_small.jpgOptus partners with The Smith Family to deliver 'student2student', a unique program that has helped many students to significantly increase their reading skills.

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  • OF_logo_new_white_small.pngOrigin Foundation supports Youth Off The Streets with skilled volunteering and financial support of the The National Scholarship Program and Dollars for Scholars Program. 

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  • Jawun.jpgLBG members Woodside Energy, NAB & Wesfarmers support employees on five week secondments assisting Indigenous organisations with economic and social development projects.

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  • josh_kennedy_kg_small.jpgWest Coast Eagles FC inspires high school students in the Pilbara with "Kicking Goals", a curriculum-based mentoring program in partnership with BHP Billiton and Swan Districts Football Club. 

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