Increase Your Valuation Through Your Social Behaviours

As we emerge from the coronavirus crisis into the much mooted 'new normal', how will investors perceive your business? Will preserving cash flow and securing liquidity be enough to convince them of the future viability of your company? Or are they looking for something more?

That last question has been answered with a resounding 'yes' by two recent reports from management consultancy, McKinsey, which found in its latest Global Survey that 83% of C-suite leaders and investment professionals expect Environmental, Social and Governance (ESG) programs to contribute more shareholder value in five years than today. The survey also indicated that respondents would be willing to pay about a 10% median premium to acquire a company with a positive record for ESG issues over one with a negative record.

In a separate piece of research, which garnered long-term investor advice to executives in relation to the coronavirus crisis, the over-riding steer was to 'look after employees first, followed by customers and suppliers' as, 'it will pay off in the long run.'

Certainly, Barcanet's own research has indicated that consumers have a keen eye on business behaviours in relation to their employees, suppliers and society at large – and this is being borne out by negative social media response to companies that are viewed as having 'behaved badly' during the Covid-19 pandemic. In this regard, consumers and investors are aligned.

Having a clear and meaningful ESG strategy in place and being able to communicate how you're delivering it is vital. Here are a few steps you can be taking to boost your value through ESG trailblazing:

Establish what your stakeholders want

Any approach to ESG will only be meaningful if it resonates with your stakeholders. So, you need to understand what behaviours your employees, customers, suppliers and investors want to see you demonstrate. Canvassing their opinions is a great place to start and will give you a set of ESG goals to aim for. There is also a deep mine of published data already available to inform your stakeholder savvy. How important is it to get stakeholder involvement and buy-in? Well, consider that two-thirds of Millennials say they wouldn't work for a company that isn't big on social and environmental responsibility - a lack of ESG credibility could seriously damage your talent pool.

Define your ESG purpose and measure how you're faring right now

By leveraging your stakeholder intelligence, you can shape a clear, strategic ESG purpose and set of goals, to benchmark against.

With the aid of data scientists, you can mine and then analyse this intelligence to produce a set of specific KPIs unique to your business, which you can measure progress against. Determining the performance gaps against stakeholder expectation will enable you to develop an improvement strategy, which can be constantly measured and monitored to ensure the results are being delivered.

Communicate your successes

Investors need to see your ESG mission in action and, more importantly, they need to see you achieving results.

Thankfully, the latest data analytics services and apps are designed to analyse your data and present it back in simple visual formats that are easy to interpret and understand, telling a clear story. The simplicity of these apps means anyone in the business can access specific reports and dashboards relating to ESG performance and present straight-forward, but informative, graphs, charts and storyboards to your investor audience.

Talk to the experts

At Barcanet, we are expert at optimising your data and giving you the tools you need to uncover value-added insight. We can help you to transform your ESG performance in an informed and targeted manner, and to showcase your success to investors.

Ian Yates – Director, Barcanet

To talk to us about any of the information in this blog, please contact hello@barcanet.com. We’d love to hear from you.