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IR STRATEGIES ARE EVOLVING IN RESPONSE TO SHIFTS IN INVESTOR BEHAVIOUR,
HEIGHTENED MARKET VOLATILITY, AND CONTINUED PRESSURE REGARDING ESG REPORTING AND
ENGAGEMENT. READ OUR 14TH GLOBAL ANNUAL IR SURVEY TO FIND OUT WHAT INVESTOR
RELATIONS OFFICERS (IROS) FROM 282 LEADING COMPANIES ACROSS THE WORLD HAVE TOLD
US ABOUT THEIR CURRENT APPROACH AND KEY PRIORITIES FOR THE COMING 12 MONTHS.

Our findings present a challenging juxtaposition. Companies are accelerating
efforts to increase engagement with a broader investor base and are striving to
refine their story and tell it through wider ranging channels. At the same time,
they find investors preoccupied with macroeconomic and geopolitical developments
at the expense of fundamental analysis, and are increasingly challenged when it
comes to getting face-time with investors. When investors are ready to take
notice of company fundamentals once again, they will find management teams eager
to share their newly refined investment cases and board chairs willing to give
up more time than ever before to meet with investors to discuss governance
matters. What leadership teams may be less eager to discuss is the disconnect
between the ESG commitments they have made and the accountability for their ESG
performance, as the misalignment with executive remuneration persists. With so
much noise in the market, it may seem like no one is paying attention, but the
reputational risks of abandoning clear, consistent and authentic communications
have never been higher.


SANDRA NOVAKOV


HEAD OF IR

Our research findings echo CDR’s own advisory experience over the past year of
supporting our global client base as they developed their ESG narratives and
navigated the communications challenges of the pandemic. Remarkable progress has
been made in sustainability reporting, particularly in Europe, and we expect
companies to continue to build on this. But with COP26 highlighting the urgent
need to move away from an ‘all talk, no action’ approach, there is more pressure
than ever on companies to demonstrate management authenticity and accountability
when it comes to ESG strategies. The advantages of being a responsible,
forward-looking company should more than offset the time and effort required to
make the necessary internal changes to future-proof the business. As
long-awaited regulatory changes to ESG disclosure start to emerge, companies
must embrace this period as an opportunity to become leaders in the field.


SANDRA NOVAKOV


HEAD OF IR

Key Findings


GAINING TRACTION

58
%
plan to increase engagement with potential investors
37
%
are finding increasing investor engagement challenging


ENGAGEMENT TOOLS

72
%
have either hosted or plan to host a CMD over the coming year
55
%
use social media channels to publicise news and events


MARKET VOLATILITY

41
%
cite the volatile external environment as a key communications challenge
45
%
plan to refine their investment case in the coming 12 months


COST OF LIVING CRISIS

52
%
are implementing cost cutting measures
26
%
are making changes to their supply chains



SHAREHOLDER BASE EVOLUTION

43
%
have noticed an increase in retail investors over the past 3 years
35
%
have increased engagement with passive investors over the past 3 years


GOVERNANCE FOCUS

49
%
have seen rising investor pressure regarding executive remuneration
33
%
of chairs spend 3 or more days meeting investors outside the AGM


ESG ACCOUNTABILITY

58
%
have a dedicated sustainability committee
75
%
have less than 10% of executive remuneration linked to ESG targets


ESG REPORTING & ENGAGEMENT

29
%
cite ESG reporting and engagement as one of their key challenges
35
%
have attended a dedicated ESG conference during the past 12 months
Deep Dive

THE CHALLENGE OF GAINING TRACTION WITH POTENTIAL INVESTORS

Reinforcing existing and building new relationships is the main priority for
companies over the next 12 months. However, thanks to both management and
investor reluctance, obtaining face-to-face meetings can be a real challenge.
Companies also report a broader challenge of gaining traction with targeted
investor groups, such as those located outside their home market or following a
specific investment strategy.

KEY TOOLS DEPLOYED TO DRIVE ENGAGEMENT

We see continued popularity of Capital Markets Days (CMDs) as a key tool to
reignite engagement. Our findings show that these events have evolved, with the
hybrid format increasingly seen as standard and virtual elements, such as remote
speakers and virtual site visits, increasingly being incorporated into events.
Social media use for investor engagement remains mainly limited to LinkedIn and
Twitter posts highlighting key developments, or sharing of video content via
YouTube.

57% use LinkedIn for investor engagement.
22% use Twitter for investor engagement.
17% use YouTube for investor engagement.
39% do not use social media for investor engagement.

THE IMPACT OF HEIGHTENED MARKET VOLATILITY

Volatile macroeconomic and geopolitical conditions across the world are
presenting a myriad of challenges for listed companies, which cite negative
market sentiment and short-termism among investors as a key obstacle to
achieving their goals. IR teams complain of investor apathy and lack of
fundamental analysis among potential shareholders, as well as challenges when it
comes to expectation management and achieving differentiation from investment
peers.

Managing macro concerns around inflation, supply chain and political disruptions
is a major challenge at the moment.
We are finding managing expectations in an uncertain operating environment more
difficult.
We are focused on ensuring the equity story is a relevant representation of the
current time's requirements.

COST OF LIVING CRISIS RESPONSE

Stakeholders are scrutinising the way in which companies are responding to
rising inflation and interest rates, and the resulting pressure on household
incomes. Our findings show a key focus on cost cutting as an immediate response
to mitigate these impacts, with initiatives to address a broader range of issues
taking more time to emerge.

IMPLICATIONS OF EVOLVING SHAREHOLDER BASES

The meteoric rise in passive investment since 2005 and growing number of retail
investors have had significant implications for IR strategies around the world.
Over a third of our respondents have increased their engagement with passive
shareholders over the past 3 years by proactively offering meetings and offering
to discuss ESG strategy and performance. In response to increased retail
investor activity, companies are simplifying investor facing materials,
increasing use of social media and video content, participating in retail
investor events and hosting dedicated events of their own.

TOP 5 ESG ISSUES

Although companies are not seeing an increase in activism overall, there is
increasing engagement with companies on ESG issues. The top ESG issues where
companies are seeing increased investor pressure are executive remuneration, GHG
emissions, board composition, employee engagement, D&I, and supply chain
management.

Executive Remuneration
reported by
49%
of companies

GHG
Emissions
reported by
48%
of companies

Board
Composition
reported by
43%
of companies

Employee Engagement, D&I
reported by
40%
of companies

Supply Chain Management
reported by
33%
of companies






THE IMPORTANCE OF GOVERNANCE IN CHALLENGING TIMES

Outside of GHG emissions, other top issues driving investor engagement focus on
social and governance concerns. The increased focus on governance is reflected
in how often chairs meet investors outside of AGMs, with a third of respondents
reporting that their company chair spends 3 or more days meeting investors
outside of the AGM.

CONTINUED RISE OF THE SUSTAINABILITY COMMITTEE

The number of companies with a dedicated sustainability committee at board level
is up to 58% (74% among large cap companies). However, many boards remain light
on experience in managing sustainability issues.

To what extent is sustainability on your board's agenda?
2019

2021

2022
Social issues are discussed at least once a year
52%
53%
43%
Social issues are discussed at all board meetings
24%
28%
23%
Environmental issues are discussed at least once a year
57%
53%
48%
Environmental issues are discussed at all board meetings
20%
28%
26%
At least one of our board members has experience in managing sustainability
issues
43%
45%
50%
All of our board members have experience in managing sustainability issues
10%
8%
6%
We have a Sustainability Committee
37%
46%
58%

IMPLICATIONS OF EVOLVING SHAREHOLDER BASES

The meteoric rise in passive investment since 2005 and growing number of retail
investors, have had significant implications for IR strategies around the world.
Over a third of our respondents have increased their engagement with passive
shareholders over the past 3 years by proactively offering meetings and offering
to discuss ESG strategy and performance. In response to increased retail
investor activity, companies are simplifying investor facing materials,
increasing use of social media and video content, participating in retail
investor events and hosting dedicated events of their own.

TOP 5 ESG ISSUES

Although companies are not seeing an increase in activism overall, there is
increasing engagement with companies on ESG issues. The top ESG issues where
companies are seeing increased investor pressure are executive remuneration, GHG
emissions, board composition, employee engagement, D&I, and supply chain
management.

Executive Remuneration
reported by
49%
of companies

GHG
Emissions
reported by
48%
of companies

Board
Composition
reported by
43%
of companies

Employee Engagement, D&I
reported by
40%
of companies

Supply Chain Management
reported by
33%
of companies






THE IMPORTANCE OF GOVERNANCE IN CHALLENGING TIMES

Outside of GHG emissions, other top issues driving investor engagement focus on
social and governance concerns. The increased focus on governance is reflected
in how often chairs meet investors outside of AGMs, with a third of respondents
reporting that their company chair spends 3 or more days meeting investors
outside of the AGM.

CONTINUED RISE OF THE SUSTAINABILITY COMMITTEE

The number of companies with a dedicated sustainability committee at board level
is up to 58% (74% among large cap companies). However, many boards remain light
on experience in managing sustainability issues.

To what extent is sustainability on your board's agenda?
2019

2021

2022
Social issues are discussed at least once a year
52%
53%
43%
Social issues are discussed at all board meetings
24%
28%
23%
Environmental issues are discussed at least once a year
57%
53%
48%
Environmental issues are discussed at least once a year
20%
28%
26%
At least one of our board members has experience in managing sustainability
issues
43%
45%
50%
All of our board members have experience in managing sustainability issues
10%
8%
6%
We have a Sustainability Committee
37%
46%
58%

SLOW PROGRESS IN ADDRESSING ACCOUNTABILITY FOR ESG PERFORMANCE

At most companies there is still no meaningful link between executive pay and
ESG-related KPIs. 75% have less than 10% of executive remuneration linked to ESG
targets (2021: 81%) and of this, 42% have 0% of executive pay linked to ESG
targets.

I’m not sure if any of our investors divested their holding in the company as a
result of unsatisfactory sustainability performance, policy or rating. They
don’t necessarily communicate why they divested.

THE CHALLENGE OF KEEPING UP WITH ESG STANDARDS

As companies grapple with increased focus on ESG issues more generally, 29% of
IR teams see ESG reporting and engagement as one of their key challenges at
present. GRI remains the most popular choice, with 54% of respondents adhering
to this in their sustainability reporting, followed by the UN Sustainable
Development Goals (42%) and TCFD (41%).

Alignment with ESG reporting frameworks
2019

2021

2022
37%

55%

54%

GRI
33%

39%

42%

UN SDGs
13%

28%

38%

SASB/Value Reporting Framework
11%

25%

41%

TCFD

INCREASING INTEGRATION OF ESG INTO OVERALL NARRATIVE

Although many companies cite this as a challenge, an ever-rising number are
integrating their sustainability narrative into ongoing reporting and newsflow -
53% now regularly reference sustainability in their results materials, up from
45% last year.

GROWING POPULARITY OF DEDICATED ESG EVENTS

Dedicated ESG events continue to gain in popularity as companies seek to
proactively communicate their achievements to the market – 35% of companies have
attended a dedicated ESG conference over the past 12 months, while 12% have
hosted their own ESG event.

To what extent is sustainability on your board's agenda?
2021

2022
Companies that have attended a third-party ESG conference during the past 12
months
30%
35%
Companies that have hosted an ESG event over the past 12 months
5%
12%

RISING IR BUDGETS AND RESPONSIBILITIES

Following a period of declining budgets and for the first time since the launch
of CDR’s IR survey in 2009, 36% respondents reported an increase in IR budgets
versus the previous year. The responsibilities of IR teams are also evolving,
with 65% of respondents having additional responsibilities alongside their core
IR role.

Report Archive


TAKE A LOOK THROUGH THE ARCHIVES OF PREVIOUS YEARS.

1st Global Annual IR Survey

2nd Global Annual IR Survey

3rd Global Annual IR Survey

4th Global Annual IR Survey

5th Global Annual IR Survey

6th Global Annual IR Survey

7th Global Annual IR Survey

8th Global Annual IR Survey

9th Global Annual IR Survey

10th Global Annual IR Survey

11th Global Annual IR Survey

12th Global Annual IR Survey

13th Global Annual IR Survey

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Download 14th Survey
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