A FTSE SMALL CAP Company Secretary writes...
We have recently received a notification that we have, for the first time, been included in the Vigeo Eiris universe of analysis. Their expectation appears to be for us to make a significant time commitment to respond to a long list of information requests. I would like to gauge the extent to which other plc’s engage with this organisation and their relative value that they add and/or influence they exert.
Our rule of thumb, is that the company has to weigh up the effort vs. benefit of responding to research type agencies depending on how influential they are on the decisions being made by its investors. As mentioned, the level of influences by research agency can diminish over time. There is a cottage industry out there.
I recall EIRIS from many years ago, albeit we do not receive at my current business. Previously, similar agencies preferred to engage directly with the company to add flesh to their research but more and more , the direction of travel is that your information is taken your information from the ARA or website and you are then asked to access it and to verify it on an on-going basis. For example, we have just completed a data verification exercise with ISS to obtain an E&S Quality Score, which involved reviewing some 300 questions and involved input from other areas outside of Co Sec. Of the 32 questions we challenged, we managed to convince them to update 12 response so whilst on the whole the research was accurate, if it matters, its worth checking it. My experience of PIRC has eroded over time in terms of correcting their inaccuracies.
An advantage of the recent ISS exercise for us, particularly as we are refreshing the content of our website is that we do have and could disclose some of the information we currently do not if it helps improve our score, so it does provide a guide of the areas with evolving importance and on-going disclosure improvement.
Agree with the comment of 8 May at 2.21pm. Never heard of them (which may be because we are small cap and not on their radar), and our general policy for this sort of thing (CDP is a particular bugbear) is that our CSR disclosure is perfectly adequate and if any investor or other interested body wants to know more then we would rather they came to our website and/or engaged with us, not some third party whose endorsement we have not sought and don’t particularly need. We also somewhat resent having to provide self-appointed third parties with information that they then make a business out of. But I can see that this engagement may (indirectly) help the company, if you feel it’s worth all the effort.
We split the questionnaire so that all departments have their input. Normally CoSec has the longest section to respond to! What I do is refer to what’s on the website or the annual report unless there’s something specific that couldn’t be answered via website/annual report. I agree it can be time-consuming but if you have a system it shouldn’t take that long.
Eiris (which one assumes must be a predecessor body to this) used to be a respected provider of sustainability research that was used by investors and voting bodies to assess CSR credentials. I have engaged with them several times over the past decade, and found their questions relatively easy to answer (provided the company has accurate CSR information). Other bodies now appear to have a higher profile in this area of measurement: for example, the FTSE4Good “bible” of criteria has become more extensive, so we will be focusing on this in the coming months to ensure we can meet what appears to be a rising bar.
I would not disagree with the previous comment if you already have good CSR disclosure on your website, but bear in mind that a company may be more likely to achieve a high score by being proactive and delivering information in the format that these organisations require.
Never heard of them. Is the nature of your business of particular interest to ESG investors? If not, I’d simply direct all such requests to the CSR section of your company website.