Systems Change

Investor Engagement

Proactively engage investors on sustainable business strategies and explain how they are linked to value creation and competitive differentiation. 

Actions

Through proactive communication and engagement with investors, companies will cultivate a market where sustainable business strategies are clearly linked to economic value and competitive differentiation. In doing so, companies will: 
 

  • Deploy corporate leadership, including the board of directors, CEO, CFO and other members of the C-suite, as critical and credible messengers of sustainable business priorities to the investment community 
  • Engage with a wide and diverse range of investors to better understand their evolving priorities  
  • Inform investors of how actions taken to address material and salient sustainability issues and opportunities have strengthened the business and delivered competitive advantage 
  • Ensure that senior management, with accountability for the issues in question, readily respond to sustainability-related investor inquiries and shareholder resolutions
  • Consistently integrate sustainable business priorities across investor engagement platforms, including the annual general meeting, quarterly earnings calls, investor days, direct engagement and other relevant forums, and design these forums for meaningful investor engagement and inclusion on sustainability issues 

Getting Started

Unlike the Critical Impact Actions, the actions within Systems Change do not have milestones leading to 2030.  Each company already has the ability to address systemic issues today. By engaging in systems-level change, companies make it easier for themselves and the entire economy to transition to a more just and sustainable economy.

This section of the Ceres Roadmap 2030 identifies a list of resources to help companies engage in systems-level change.

Blueprint for Responsible Policy Engagement on Climate Change - The Blueprint offers concrete recommendations on how companies can establish systems that address climate change as a systemic risk and integrate this understanding into their direct and indirect lobbying on climate policies.

Addressing Climate as a Systemic Risk: A call to action for U.S. financial regulators - This Ceres report outlines how and why U.S. financial regulators, who are responsible for protecting the stability and competitiveness of the U.S. economy, need to recognize and act on climate change as a systemic risk. It provides more than 50 recommendations for key financial regulators to adopt.

2020 Ceres Policy Outlook - This report offers a glimpse into the political landscape and the types of policy measures Ceres will address in the coming year, highlighting corporate engagement opportunities as we look to strengthen policies that help advance a carbon-free economy.

Change the Conversation: Redefining How Companies Engage Investors on Sustainability - Drawing from interviews with Ceres investor partners, this report highlights key trends in investors’ evolving expectations for corporate sustainability. It presents nine recommendations to guide companies toward more meaningful and effective investor engagement on ESG issues, helping them to not only meet investor expectations, but also capture competitive advantage.

Investor Guide to Deforestation and Climate Change - This guide gives investors a framework to help them understand and engage on deforestation-driven climate risks across their portfolios. The guide will help investors  understand the drivers of deforestation risk and prioritize company engagements based on industries, geographies and sourcing patterns. The guide also outlines key expectations that investors should be looking for in corporate climate and deforestation commitments and example questions for company and sector engagements. The guide also provides concrete next steps investors can take to address deforestation risk.

The Investor Agenda - The Investor Agenda was developed for the global investor community to accelerate and scale up the actions that are critical to tackling climate change and achieving the goals of the Paris Agreement with the aim of keeping average global temperature rise to no more than 1.5 degrees Celsius. The Investor Agenda is a collaborative initiative that seeks to speed the transition to a net-zero emissions economy by 2050 or sooner. This includes elevating the profile of existing investor actions and initiatives on climate change and amplifying investor voices calling for government implementation of the Paris Agreement.
 

 

Companies in Action

Adidas underscores role of sustainability as integral part of its business model at the company’s annual meeting and in its integrated report. Among the various investor engagement strategies, Adidas' Annual General Meeting (AGM) is perhaps the biggest opportunity for educating a broad cross-section of investors and positioning the company’s leadership as informed messengers of the sustainable business strategy. A small but growing number of companies are now integrating sustainability commitments and progress into their annual meetings. At Adidas' 2019 AGM, the company’s CEO provided an overview of the company commitment to sustainability, underscoring how it has successfully integrated sustainability into its business model. Among the updates, Adidas made 5 million shoes with Parley Ocean Plastic in 2018 up from 1 million the previous year, 100% of the cotton used in its products came from sustainable sources and the company is aiming to use 100% recycled polyester by 2024. Furthermore, the company made the shift to releasing an integrated report in 2017 and, since then, it has incorporated sustainability and non-financial updates and priorities in its annual report. In its reporting, Adidas highlights its commitment to systems level change by disclosing its affiliation and motivation for collaboration with more than 10 multi-stakeholder groups in the ESG space.

Intel diversifies investor engagement strategies and leverages process to create long-term value. During its nearly two decades of engaging shareholders on sustainability, Intel has found success by diversifying its engagement strategies and using consistent messaging across its investor communications. In 2018, Intel’s integrated outreach team—a collaborative effort of the corporate responsibility, investor relations and corporate governance teams—met with investors representing an aggregate of over 50% of the company’s outstanding shares to discuss priority sustainability issues. Feedback gathered through this outreach effort helped the company stay apprised of evolving investor expectations and build important relationships.  Updates and progress are shared with the board’s Corporate Governance and Nominating committee on a regular basis and the company also continues to further integrate sustainability information into different financial reporting vehicles in response to investor feedback. In 2019, Intel incorporated ESG information into its 2019 10-K, 2019 proxy statement and investor relations website. The company continues to leverage these year-round engagements and reporting mechanisms to strengthen accountability, improve decision-making and create long-term value.

Microsoft fosters integration across internal teams resulting in a more strategic outreach to investors on ESG priorities. For many years, Microsoft has been integrating citizenship priorities throughout the company and engaging its shareholders on relevant ESG issues. Recently, this engagement has expanded from smaller sustainability focused investor firms to receiving requests from large pension funds and other mainstream investors all over the world. In response to this heightened level of investor interest, Microsoft in spring of 2018 established the position of ESG Engagement Director within the of Corporate Secretary’s Office to manage the company’s shareholder engagement on ESG issues. This expanded capacity and integration allows the company to conduct proactive engagement with more than 50 of its top institutional investors representing nearly half of the company’s ownership, conduct investor ESG roadshows in key markets and further reporting efforts to better meet investor expectations. The company is also looking to leverage key members of its board of directors to participate in investor engagements and speaking opportunities. This approach has allowed the company to stay abreast of evolving investor expectations and integrate feedback into its strategy and reporting efforts strategically.

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