ESG and Global Trade Growing Concerns for Investor Relations: 2019 BNY Mellon Survey

Global investor relations (IR) professionals cite Environmental, Social and Governance (ESG) and global trade as increasing concerns, according to the BNY Mellon Depositary Receipts 12th bi-annual edition of Global Trends in Investor Relations report. The report is based on a survey of 335 respondents from 41 countries, spanning all macroeconomic sectors and economy types, as defined by GICS and MSCI, respectively.

Driving the ESG Conversation

Since the 2017 survey, ESG considerations have become an increasingly important component of the investment process. However, based on the 2019 survey results, there is a significant opportunity for corporate issuers to close the information gap with investors regarding their ESG agendas.

• Bring the right people to the meeting. Respondents reported a significant difference in tapping into ESG expertise in investor meetings - 83% of investors brought ESG specialists to meetings, while only 28% of issuers brought a member of their sustainability team.
• Top five increases in ESG inquiries from investors:

51% Board composition and structure
42% Diversity & inclusion
35% Climate change and carbon emissions
34% Executive compensation
31% Energy efficiency

Heightened Global Trade Concerns

Respondents to the 2019 survey were asked to rank the perceived influence of several issues on overall global market confidence, which revealed increased concern about the global economic and trade environment.

• Global trade: jumped 32 percentage points since 2017 (73% of respondents).
• Global trade ties geopolitical risk as the top concern: geopolitical risk increased by 17 percentage points since 2017 (to 73%). The regulatory environment increased 18 percentage points (to 59%).

“The investor relations community is the tip of the spear when navigating the evolving expectations of shareholders and other stakeholders, and conveying the value proposition for issuers,” said Chris Kearns, CEO of BNY Mellon Depositary Receipts. “The data leveraged from this report supports actionable and accurate advice for our clients and IR professionals across the world as investor demands change.”

Additional findings include:

• 52% of respondents communicated with an ESG rating provider in the past 12 months, an increase from 34% in 2017.
• A significant minority of respondents reported a negative impact from the European Union’s MiFID II legislation, primarily in Western Europe (39%) and North America (33%).
• IR professionals are taking a more active position at board meetings, with more than half attending (a steady growth from 56% in 2015, 57% in 2017, to 64% in 2019). More often than not, the IR person in attendance is male (65%) versus female (52%).
• The percentage of respondent companies communicating with passive investors increased to 38% from 33% in 2017, with large increases in Emerging Asia (34% vs. 20%) and North America (52% vs. 38%).
• IR teams’ significant engagement with debt investors and rating agencies was driven by respondents in Latin America (53% and 63%, respectively) and Western Europe (52% and 39% respectively).

About BNY Mellon BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries. As of Dec. 31, 2019, BNY Mellon had $37.1 trillion in assets under custody and/or administration, and $1.9 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com.