Corporate investor relationship failing to communicate to investors.

The results of a summer survey from Thomson Financial make worrying reading for investors.  On the plus side, 36% of the mainly US-based investors questioned said they considered corporate responsibility criteria “very important” when making investment decisions. But only 8% of investor relations officers (whose job it is to communicate with shareholders) said investors considered social and environmental factors to be “very important”.  Investors wanting information on corporate responsibility are more likely to get it in London than in New York.

The mismatch suggests some investor relations teams are lagging investors on awareness about the link between social and environmental performance and share values. More than two-thirds of the investors, which include both mainstream and specialist funds in the US, said that their preferred source of corporate responsibility information was the investor relations department, with just 14% saying they would go directly to a corporate responsibility officer. But only 59% of investor relations officers think that corporate responsibility has a real impact on share prices, compared with 73% of investors.

Observers note a difference in the approach to SRI in the US and UK:  In the US it has been more confrontational, whereas in the UK it has been more about building relationship and communication.  Firms in both countries still struggle to communicate to consumers, who are more cynical because of poor industrial track records.

Thomson Financial offers a few simple pointers on corporate communications: Focus on communicating with the 10 to 15 key shareholders, identifying any CR programmes, adding slides to their existing presentations and publishing more information on their investor relations websites. Demonstrate to investors that you are up to speed with the companies’ corporate responsibility work.


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