The year 2020 has been extremely challenging for business, from dealing with COVID-19 and its economic impacts to addressing the worsening climate crisis. Amid these challenges, investors have increased their focus on how companies are acting on environmental, social, and governance (ESG) issues. How can companies best prepare for investors’ current demands?
To address this new era of ESG investing, Lauren Abbott, Global Vice President, Investor Relations at Anheuser-Busch InBev, shared her expertise at BSR Conference 2020 this past October. After the event, we connected with Lauren to hear her thoughts on what business, in particular those working in sustainability and investor relations functions, should do to meet the current moment of ESG investor interest and ultimately build a more equitable, sustainable future.
In light of 2020’s crises—the COVID-19 pandemic, its economic fallout, the climate crisis—we’re seeing growing attention from investors on how companies are handling ESG issues. How can companies meet the moment of ESG investor interest? What should ESG investor engagement look like?
Our approach to ESG investor engagement has evolved quite a bit over the last 5-6 years. In the beginning, our ESG investor engagement was done through targeted 1- or 2-day roadshows in select European cities (e.g. London, Paris) because the demand was very precise and not broad-based.
Fast-forward to today—we now do 5+ day roadshows per year across a variety of European cities (of course, virtually this year) as well as several ESG-focused investor conferences in both Europe and North America in light of accelerated demand and interest. We have also participated in conferences and events pertaining to specific topics, such as water stewardship, in a variety of countries including South Africa and Brazil.
Based on these experiences, I believe it is fair to say that ESG investing has become a global trend and that I only expect this to continue. Engaging with ESG investors is done in conjunction with other teams at our company, specifically legal, corporate affairs, and sustainability.
Investors are increasingly becoming more thoughtful and sophisticated in their questions. They understand what’s material to our operations and value chain, and they look for sustainability actions that are strategic and integral to our business.
2020 has been a year of huge disruptions and uncertainty. How have the events of 2020 changed investor expectations for companies, as related to ESG issues? How have these expectations evolved from recent years?
What we have seen with COVID-19 is that there are greater expectations of corporate companies. We speak often with investors and analysts now about the health and safety measures taken to protect the well-being of our people (including their mental health) and the initiatives in place to support the communities in which we operate, from converting our operations to produce and donate water and more than three million bottles of hand sanitizer in over 25 countries to creating platforms to advertise local delivery options for pubs, bars, and restaurants.
We have found that investors are genuinely interested in the work being done by our company to support our people, our communities, and our customers during these uncertain times. We intend to continue communicating such initiatives proactively to keep our investor base informed of how we are focused on being part of the solution.
Within a company, the investor relations and sustainability functions are often quite separate. In what ways do you collaborate with the sustainability team at AB InBev? Can you share any best practices with us on how the teams can work together to satisfy ESG investor interests?
As mentioned before, our ESG engagement is done together with our legal, corporate affairs, and sustainability teams, who are fantastic partners. In particular, I personally have found that a close partnership with our sustainability team—who really drive the agenda and are leading the work every day—is an effective structure. Our sustainability team is so knowledgeable in their space that they offer deep and unique insights to our investors that they would only get from the people that lead the work. I believe this offers our investors a deeper understanding of our strategy in an authentic and credible way.
With that said, it’s on all of us to advance our sustainability agenda and, in particular, reinforce our commitment to the UN Sustainable Development Goals (SDGs). For example, our CFO, Fernando Tennenbaum, is a founding member of the UN Global Compact CFO Taskforce, whose goal is to align corporate investments and finance to the UN SDGs. To support this commitment, one of our sustainability directors and I are part of the CFO Taskforce Working Group, which will deliver a detailed blueprint for how to implement the taskforce’s principles within our organization.