The New T&Cs of Investor Relations
An Open Letter to the CFO
May 27, 2020DownloadsDownload Article
The coronavirus pandemic will result in increased scrutiny on how your company treats employees, clients, and the wider community. This scrutiny creates an imperative to embrace new levels of transparency and compassion (T&C) when communicating with your investors.
In this short article, we speculate on the impact of the pandemic on investor relations and make recommendations for how CFOs need to adapt to new socio-economic realities.
The pandemic will revive the triple-bottom-line ideal
A triple-bottom-line refers to the pursuit of profit in a way that also creates value for people and the planet. Going forward, we expect this ideal will resonate with the public to a much higher degree than before. Why? Because conversations on these two topics will be difficult to separate from a discussion about profits in a post-pandemic world. New precedents will be set, and we expect them to have enduring effects.
Your investors will pursue increased ESG compliance
If you are like most CFOs, you’ll be skeptical about our claim. And for good reasons: qualified investors have traditionally relied on decision-making processes that made little or no allowance for environmental, social and governance (ESG) matters. A simple glance at the latest sell-side analyst reports will likely show us a continuation of that approach.
But things are already changing. Even before the pandemic, we’ve noticed a growing number of institutional investors prioritizing ESG-compliant targets. We’ve seen retail investors increasingly susceptible to storytelling pouring out of media outlets on these topics. And COVID-19 is only likely to accelerate these trends.