S3: Investor Engagement
CERES ROADMAP EXPECTATION
|Companies will address specific sustainability risks and opportunities during annual meetings, analyst calls and other investor communications.|
Not only companies are using the Ceres Roadmap as a guide for embedding sustainability into decision-making, investors are also using the Roadmap to engage with the companies they own. Hear from some of the world's leading investors as they talk about the Ceres Roadmap and their expectations for sustainable business performance. Watch the video...
Check out Roadmap in Action for more examples of how companies are implementing the Ceres Roadmap.
Investors are critical stakeholders and can wield considerable influence on the sustainability strategy, goals and performance of the companies they own. Companies should report on and discuss specific sustainability risks and opportunities in investor communications and engagements, including annual meetings and quarterly earnings calls. These engagements should provide investors with a deeper understanding of sustainability risks and opportunities. Clear, concise sustainability information allows investors to evaluate performance, so that they may reward companies whose activities address social and environmental challenges.
HOW ARE COMPANIES PERFORMING?
In The Road to 2020: Corporate Progress on The Ceres Roadmap For Sustainability, we evaluated 600 of the largest U.S. companies on their progress towards meeting the expectations laid forth in The Ceres Roadmap for Sustainability using data compiled and analyzed by Sustainalytics.
Leading practice for this expectation requires companies to communicate both sustainability risks and opportunities to investors at their annual general meetings, during analyst calls, in their financial filings and throughout other mainstream investor communications. Despite a considerable increase in reporting and disclosure, however, sustainability remains absent from most companies’ communications with investors.
Both companies and investors have a role to play—for companies it is to provide quality data and analysis, as well as directing investors to this information; for investors it is to request information regarding sustainability risks when engaging with companies and to reward companies for improved sustainability performance. In this assessment no companies made it into Tier 1, but the 45 companies included in Tier 2 are making strides to increase sustainability-related communication and direct engagement with the investment community.
The failure of companies to adequately disclose sustainability information within mainstream investor communications has prompted independent financial research providers to fill the gap by including sustainability information as part of their data services. Bloomberg, for example, has added ESG data to its equity platform, allowing analysts, portfolio managers and investors to access centralized sustainability data reported by companies just as they access financial data. For this data to be meaningful, however, companies must provide high quality information that covers the full range of material sustainability issues.
As ESG criteria become increasingly integrated in mainstream investment decisions, investors are looking for clearer articulation from companies on the material risks of environmental and social exposure. EMC and Intel are starting to share information regarding sustainability goals and performance with investors through a variety of forums including shareholder meetings, proxy letters, investor packets and investor conferences. However, these companies are the exception—not the rule.
Click on a performance tier below to view more information about how companies are performing.
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