Purposeful investor relations inspire and build investor credibility. It is about communicating the story to your stakeholders to spark enthusiasm and create a higher value proposition.

Companies should integrate analytics, technology and creative storytelling to communicate the story effectively.

What is IR?

Investor relations (‘IR’) provides the framework that evolves around how a company wins and is future-proof.

IR begins by delving into business, understanding the drivers, and analysing competition and the prospects of the addressable market. To shape the story, IR needs to transcend beyond financial outcomes.

As stakeholders’ economies become more complex, the demands are higher and more inclusive. They revolve around accountability, transparency, disclosures and the impact on society and the environment.

Understanding purpose and the non-financial

Purposeful investor relations direct the company towards building the right foundations in reporting, governance and sustainability to explain how profit and purpose coexist in the organisation. Investors perceive companies holistically and make investment decisions based on financial and non-financial metrics.
Impactful sustainability disclosures include:
• Climate reports (operational carbon footprint, carbon intensity, temperature alignment scenarios
• Social Impact Reports (ethics, communities, products)
• Pillars of climate strategy and messaging of science base objectives
• Climate transition plans and commitments on how to achieve them

Building trust and accountability

The building blocks of trust and accountability are fundamental to attracting and retaining investors and are reflected in valuations and, subsequently, the cost of capital.

Continuous engagement with investors is required to understand investor concerns and perceptions and access the critical information to enable them to make investment decisions. Information should be disclosed relatively and transparently while keeping regulatory requirements in mind.

Measuring success

The key metrics for measuring success in IR are:
• Creating a clear story with visible drivers
• Optimising share register by bringing in a mix of short-term and long-term investors
• Enhancing disclosures
• Benchmarking and peer group results
• Consistency in meeting expectations and consensus
• Effective investor material like digital annual and sustainability reports and videos to measure engagement
• Capital market and investor days feedback reports

Overall, investor relations is a strategic function that can significantly impact a company’s financial performance and long-term success.