Investor Relations

IMPLEMENTING BEST PRACTICES IN INVESTOR RELATIONS 1173.5.7 Corporate Social Responsibility andSustainable DevelopmentClosely knit with corporate governance, sustainable development is apolitical, social, and economic concept, defined by the United Nations as adevelopment process that “meets the needs of the present without compromisingthe ability of future generations to meet their own needs.” Corporatesocial responsibility (CSR) has emerged as a major nonfinancial issue forcompanies to report on. It encompasses vast areas of corporate life:Social and community-related issues, including philanthropy programsfor certain companies;Sustainable development factors (environment, health, safety, forinstance).One result of the increasing popularity of sustainable development has beenthe development of socially responsible investing (SRI). The number of SRIfunds and the amounts under management are growing, with SRI factorsgaining in importance in the investment decision-making process; specialindices are being created, and rating agencies are dealing with InvestorRelations teams on this subject, except where a separate “division for sustainabledevelopment” has been set up. This trend has also led regulators torequire specific reports, while dedicated SRI presentations and roadshowsare developed by the company.There is no doubt that communication around corporate social responsibilityand sustainable development has become a vehicle for companiesto enhance their image, reputation, and valuations, though there is a pricetag: Stock-market regulations and specialized rating agencies are increasinglyrequiring data that be calculated with special reporting instruments,which has a cost and adds another reporting layer on top of already complexsystems. This is an area where financial and nonfinancial disclosuresmeet and impact valuation. It only makes sense for issuers to go to thislength if they plan to use the same information for their management andstrategy.3.5.8 Investor Relations for EmployeeShareholdersInvestor Relations also target employee shareholders, even if in most casesthese are being taken care of by a dedicated department, quite often withinthe human resources department. Laws often promote employee savingsplans with employees being offered company shares at particularly attractive