27 July 2021

Starting the ESG journey

ROWAN CLARKE, Investor Relations

At FIRST Advisers, we are increasingly offering advice to companies on how to best position themselves to meet investor demand for ESG accountability. What was once seen as a topic for socially conscious asset managers, is now widely adopted by investors.

ESG was a hot topic at the US based National Investor Relations Institute’s (NIRI) Virtual Conference in June. Several NIRI speakers addressed the evolving ESG landscape and gave some useful advice for company’s starting their ESG journey. In this article, we outline a few of the recommendations provided.

Recommendation 1:

Establish a framework of good governance

Board oversight and a robust governance framework for disclosure is crucially important. For a company to be sustainable over the long term, the board must explicitly prioritise ESG issues as important. This can involve forming a standing committee to regularly review ESG issues or including ESG as part of an extended Risk Committee. ESG must be viewed as a standing agenda item for the board.

Although Governance is one part of the ESG equation, it also informs the Environmental and Social parts as well. When investors talk to companies, they want to understand how leadership is positioned to navigate the ESG challenges over the long term. Covid-19 has blurred the lines of ESG and has shown that what is considered important can change quickly. Quality leadership ensures that companies are well placed to succeed and weather evolving ESG challenges.

Recommendation 2:

Conduct a materiality assessment

When embarking on the journey, it is important to know what a company’s real ESG risks are and what are perceived risks. A materiality assessment of ESG issues allows a company to stay focused on those ESG issues that are important to them. This is what investors want to know from the company.

Companies are advised to break an ESG program down into bite size pieces and address those issues that can be tackled quickly in the first year and delay what will require a longer-term approach. Companies may be doing far more than they initially realise to address relevant ESG risks, so finding the low hanging fruit and disclosing this progress is a good step.

Recommendation 3:

Maintain good disclosure practices

As a rule of thumb, it is advised that ESG disclosure should be reportable, repeatable, and auditable. ESG disclosure must also be transparent. It is not enough to simply have the relevant information available on a company’s website. If investors have trouble looking at a company’s website, if they have difficulty reviewing the relevant information because it is written in a challenging way or presented in a way that reads differently from reality, it will only serve as a red flag to investors. Honesty is the best policy when it comes to ESG disclosure. Companies are advised not to make the current situation a better case than it really is.

If an ESG issue is important to the company, it needs to be disclosed. There are other non-material ESG issues that can become material over time, particularly for the Social part of the equation. If the company is having a conversation with investors and cannot disclose something at the time, it is important to get back in touch with those people when something has been announced on the matter. Disclosure is only as good as the conversations that are had with investors. Giving them the information that they need on the issues that are important to them, in a timely fashion, is key.

There are about 600 ESG rating firms that assess how companies manage ESG risks. The lions’ share of these are irrelevant to companies and investors. The Sustainability Accounting Standards Board (SASB) provides companies with a useful framework for starting to identify ESG issues that are relevant to financial performance across 77 industries. The Taskforce on Climate-related Financial Disclosure (TCFD) provides a framework to report on climate-related financial information and is widely accepted by investors.

Recommendation 4:

Don’t be intimidated by ESG

Disclosure and engagement are important to making a fulsome assessment of how companies are overseeing ESG risks and capitalising on opportunities. Much of the conversation will focus on the company’s journey. This includes the steps taken to put the right infrastructure in place that will help companies understand what ESG issues are material, where data will be collected to assess how companies can drive progress, and what the company’s leadership looks like along with the internal channels of communication. Investors will want to know the lessons that a company has learnt and the challenges they have faced to address ESG issues.

In having these talks, investors know that no two companies are the same. What they want to see is the company making progress to resolve material ESG issues, not that ESG risks are being resolved prematurely.


With leading asset managers like BlackRock making bold aspirations to align their investment mandate to achieve net zero emissions by 2050, and US Congress introducing 267 bills specifically on ESG and climate change between January and May, it is fair to say that this is not a passing fad. These recommendations are positive steps that all companies can make to address questions on ESG from investors.

30 April 2021

The Convergence of ESG and Activist forces

VICTORIA GEDDES, Executive Director Activism during COVID A review of the impact of COVID 19 on activism globally in 2020 would suggest that it largely reinforced the trend of slowing activity that has been evident since its peak in 2018. In Australia the number of companies publically subjected to activists’ demands returned to the annual […]

Read More
31 January 2021

Fink doubles down on climate

GILES RAFFERTY, Corporate Communication and Media Advisor Restating that climate risk is investment risk, Larry Fink, the Founder, Chairman and CEO of Blackrock, the world’s biggest and arguably most powerful investor, is calling for companies to share their plans for the transition to a net zero economy in his annual letter to CEOs. Mr Fink […]

Read More
31 January 2021

ASX introduces new ‘15% Rule’

Ben Rebbeck, Founding Director Recently, the ASX announced updates to Guidance Note 8 on continuous disclosure requirements in relation to earnings guidance. While the ASX retained the framework of its existing guidance in the update, its changes to Guidance Note 8 include a new ‘15% Rule’ regarding the impact of broker consensus earnings on guidance and earnings […]

Read More
30 October 2020

ESG Reporting among the ASX300

DAN JONES, Manager Shareholder Analytics As institutional investors increasingly demand more accountability for Environmental, Social and Governance (ESG) performance, companies face pressure to improve their standards of ESG reporting. However, unlike financial data, ESG information has no legislated or regulatory reporting guidelines or formats so the mechanism for delivery and any adoption of a reporting […]

Read More
30 September 2020


Between 2016 and 2018, FIRST Advisers monitored how long companies took to release their Annual Report following the release of their Financial Results. The implementation of Same-Day Reporting has become an industry standard in terms of best practice investor relations because it reflects a commitment to release this document at a time when it has […]

Read More
29 June 2020

The Tipping Point for ESG is Now (Part Two)

VICTORIA GEDDES, Executive Director. In Part 1 of our article on ESG last month* we looked at the extent to which ESG reporting has gained hold in Australia and whether the strong performance of ESG funds recently might represent a moment in time when investing according to ESG principles becomes mainstream. We introduced the Standard […]

Read More
28 May 2020

The Tipping Point for ESG is Now

VICTORIA GEDDES, Executive Director. The relentless push towards the adoption of Environmental, Social and Governance (ESG) reporting by companies across the globe appears to be gaining momentum. As entire populations have gone into hibernation in an effort to contain the spread of the coronavirus, the topic of greatest interest in the global investment community is […]

Read More
29 June 2019

Is 2019 ‘The Year of the ESG Fund’?

BEN REBBECK, Executive Director The ascendency of ESG matters within Fund managers, Board rooms and with IROs has unquestionably been rising rapidly in recent years. In this context, a question we often address from Directors and IRO is: Are ESG funds just another short term market trend, like ‘Hedge Funds’ were some 5 to 10 years […]

Read More
29 March 2019

Feb 2019 Guidance Review

DAN JONES, MANAGER SHAREHOLDER ANALYTICS During February we monitored companies in the S&P/ASX300 Index that reported for the period ending 31 December 2018, building a picture of the approach to guidance in this market and what that guidance is telling us about outlook for FY19. Around three quarters of companies within the S&P/ASX 300 index […]

Read More
31 January 2019

February reporting preview

We entered the last reporting season in August 2018 with a high degree of optimism. That optimism was very short-lived as markets experienced a sharp sell-off in August, with actual results falling short of previous forecasts. Subsequently, news headlines have kept investors in a pessimistic mood, examples being the ongoing Brexit uncertainty and the ever-present […]

Read More
31 January 2019

Timing Matters When Releasing Results

It is important for a company to select an appropriate day when presenting its financial results.  With so many companies competing for attention from buy-side, sell-side and financial media, the correct timing of a result can be very important, especially for smaller companies. Understanding where the peaks and troughs are during a reporting season can help […]

Read More
1 November 2018

Annual Report – Same-Day Reporting

In July 2018, FIRST Advisers’ analysis of financial results reporting noted the continued trend by ASX 300 companies to publish their Annual Reports on the same day as their Financial Results. Termed ‘Same-Day’ or ‘Simultaneous’ reporting, we have updated our findings to see how ASX 300 companies with a June 30 balance date faired in […]

Read More
3 September 2018

Who, What & How Much? What FY19 Guidance is Telling Us

Dan Jones, Manager Shareholder Analytics During August we monitored all companies in the S&P/ASX300 Index that reported for the period ending 30 June 2018, building a picture of the approach to guidance in this market and what that guidance is telling us about outlook. Almost 250 companies within the S&P/ASX 300 index gave their results […]

Read More
27 July 2018


Ben Rebbeck, Executive Director Environmental, Social and Governance (ESG) factors were once the poor cousins of institutional investors’ metrics – nice to have, but not a primary driver of valuation or investment. This is no longer the case. Times have changed, investors are more sophisticated, information is more prevalent and reliable – ESG is now […]

Read More
29 June 2018

Setting the standard – ‘Same-day reporting’ of the annual report at Full Year Results

Daniel Jones, Shareholder Analytics and IR FIRST Advisers highlighted a trend amongst ASX 300 companies towards publishing annual reports on the day they announce full year results, ‘Same-Day Reporting’, in early 2017.  We have updated this analysis in order to confirm if a new standard is emerging around best practice for publishing annual reports. For […]

Read More
8 September 2017

Guidance by Australian Companies

VICTORIA GEDDES, EXECUTIVE DIRECTOR During the profit reporting season for the period ending 30 June 2017, we monitored all the companies in the S&P/ASX 300 that reported up to 31 August, building a picture of what the favoured approach to guidance is in this market and what that guidance is telling us about the outlook […]

Read More
2 August 2017

Trading Updates for FY17 Reported in July

As a precursor to monitoring how companies provide guidance for FY18, we have been tracking Trading Updates for FY17 that were released during July by ASX300 companies (only 4%). The take-outs are as follows: 42% provided an upgrade from their previous guidance with the price performance experiencing a similar upward trend 33% of the companies […]

Read More
1 August 2017

The Annual Report and the importance of storytelling

Philippa Ellis, Governance & Investor Relations “Stories are the most powerful communication tool we have bar none” according to Andy Goodman of The Goodman Centre. We all carry stories in our heads (pre-conceptions) that strongly influence the way we view the world. These stories cause our mind to be closed to alternative viewpoints even when […]

Read More
3 July 2017

How to Engage with Passive Investors this Reporting Season

David Whittaker, Senior Investor Relations Adviser The growth in passive investing is one of the biggest shifts occurring in global capital markets. Passive funds now hold as much as 40% of total US equity market assets, up from around 20% a decade ago*. However, very few companies are adjusting their IR strategy to take account […]

Read More
9 June 2017

The Importance of Non-Financial Information

NIRI Annual Conference 2017 Ben Rebbeck, Executive Director On 4 June 2017, the National Investor Relations Institute (NIRI) Annual Conference got underway in Orlando, Florida. This Conference brings together over one thousand of the world’s thought leaders and senior professionals in Investor Relations and it is one that we have been attending religiously for the past […]

Read More
9 May 2017

When to Publish the Annual Report – A New Benchmark is Emerging

VICTORIA GEDDES, EXECUTIVE DIRECTOR Ten years ago I can remember marvelling at those companies that managed to get it together and release their full, glossy annual report on the same day as reporting their full year results. You could count them on the fingers of one hand. More commonly, three to four months after the […]

Read More