In recent years, decarbonisation and the pursuit of net zero emissions have become critical priorities for companies across various industries. The Investor Relations (IR) industry is no different and accountability within the industry is going to be central to the success of these decarbonisation efforts as well as to meeting the net zero targets. Accountability frameworks exist for a wide range of industries so, for the sake of this blog, we have looked at others and landed on 8 broad categories, adapting each of them to the specifics of the IR world. This blog will look at each of these categories individually and will assess how they apply to our industry before drawing conclusions on why accountability is so important and how it can only work with a critical mass of industry buy-in.

• Commitment and Goal Setting: This is the first step towards industry accountability, and it is arguably the biggest hurdle. Just as starting a blog is the hardest part, getting started on your decarbonisation journey can often be a significant stumbling block. However, the time is undoubtedly now and the sooner you start, the easier it will be in the longer term there is no better place to start than with a very clear communication of your commitment to decarbonisation and your specific net zero targets. At first this announcement should be internal as employee buy-in is a pre-requisite to any broader form of communication. This involves IR teams outlining short-term and long-term goals, the timeline for achieving them, and the strategies and technologies that will be employed.

• Progress Tracking and Reporting: One of the key principles of accountability is transparency, making information about the processes accessible. Investors increasingly demand transparency and regular updates on a company’s progress toward its decarbonisation goals. IR teams will need to create reports and share them regularly, including quantitative metrics such as carbon footprint reduction, energy efficiency improvements, and the adoption of renewable energy sources. These reports should be aligned with recognised standards such as the Global Reporting Initiative (GRI).

• Stakeholder Engagement: When looking to operationalise your ESG efforts, a key question is: are you addressing the needs of your stakeholders? Once internal buy-in is secured, IR teams should engage with their wider stakeholder universe from investors to bankers, advisors, PR firms, suppliers etc. to demonstrate the company’s commitment and to drive change in the wider industry. Showing that you are holding yourself and your company accountable will breed further accountability within the industry.

• Risk Management: Decarbonisation efforts are not without risks, such as regulatory changes or technological challenges. IR teams are responsible for transparently communicating how these risks are managed and mitigated, reassuring investors and other stakeholders that the company is prepared to adapt and remain resilient amidst the uncertainties of this nascent challenge. There are also reputational risks and many activist groups and nongovernmental organisations are shining a spotlight on environmental performance (or lack thereof). IR teams for certain industries will be acutely aware of this already and the best way to combat it is to demonstrate accountability through transparently communicated action.

• Alignment with Financial Performance: A key aspect of industry accountability is demonstrating how decarbonisation and net zero strategies are aligned with long-term financial performance. IR teams must articulate the business case for sustainability, highlighting how these efforts contribute to cost savings, innovation, competitive advantage, and shareholder value. It’s no longer enough to consider profitability as the sole measure of success. Sustainable accountability means weighing business decisions against their long-term environmental and social impacts.

• Third-party Verification: IR teams should use third-party verification for their sustainability reports and carbon emissions data. This will reassure investors and third-party involvement further enhances the accountability within your organisation and the wider industry.

• Regulatory Compliance: As governments introduce more stringent climate-related regulations, compliance is going to be key for the IR industry as with all industries. With so many differing ESG reporting frameworks and the onslaught of new and proposed country-specific regulations, IR teams need to establish trust and demonstrate accountability by telling their authentic story and sharing the progress they are making towards their unique commitments.

• Continuous Improvement and Innovation: Finally, industry accountability involves a commitment to continuous improvement and innovation, and this will be no different with decarbonisation efforts. IR teams should highlight ongoing initiatives to enhance sustainability practices, invest in new technologies, and adapt to emerging trends and challenges in the global effort to achieve net zero emissions. Examples of this include staying at the forefront of what is deemed best practice when it comes to offsetting and maintaining an assessed, sustainability forward supply chain.

As evidenced by this framework, IR industry accountability is going to require a multifaceted approach to ensure that there is a genuine shift that will enable us to decarbonise and pull our weight in the fight to meet the overall net zero targets. We would be very interested to hear your thoughts on this breakdown of the key areas – how might you adapt it to the specific needs of your management team, industry niche and investor relations efforts. In return, we can tell you how we can help you with several aspects through GreenerRoadshows including progress tracking and reporting, third-party verification and continuous improvement and innovation.

If this piques your interest, then get in touch and check back in at the end of September for Blog number 9 of the 2024 series!