In preparation for a virtual ESG event and ongoing investor communications programme, National Grid’s IR team commissioned some highly targeted market research to understand which ESG-focused investors and analysts the company needed to engage with and which specific topics they most needed to learn more about.
A specialist investor engagement firm, QuantiFire was mandated to reach out to institutional investors and analysts in both equity and debt markets - including both ESG specialists - with the following objectives:
- Objective 1: Identify investors and analysts who wished to attend a virtual launch event on National Grid's ESG progress and ambitions, and receive ESG communication from the company
- Objective 2: Establish current views on National Grid’s ESG policies and performance, and quantify what information the market most needs
- Objective 3: Provide ‘planning intelligence’ to inform National Grid’s ongoing ESG investor engagement programme
"The insights from our targeted ESG research were invaluable when planning our virtual event, enabling us to plan a more effective and tailored future programme of ESG communications."
- Caroline Dawson, Investor Relations Manager, National Grid
To begin with, capital markets professionals were profiled to identify relevant portfolio managers, buy side analysts and ESG analysts to target for the study. (This step was undertaken with great care, to avoid frustrating investors with poorly targeted outreach and to ensure compliance with GDPR).
Then, selected individuals were invited to register their interest in National Grid’s ESG programme via an online process. Respondents were asked to explain their approach to researching and incorporating ESG-related information and to confirm which areas of environmental, social and governance information they would most like to learn more about, with specific regard to National Grid. Investors responded very well to this approach, giving positive initial feedback in many cases (“Good initiative to set up this research” / “Great idea to have an ESG day” / “We look forward to future engagements!” etc).
Lastly, the responses that were obtained were combined with additional IR data, such as shareholdings, past meeting records and investor profile information such as EUM, location / time zone data, etc. This added context and usability to the results, so that outreach and communication from National Grid could be prioritised according to the profile and requirements of different respondents.
Objective 1: Identify investors and analysts
A total of 202 investors and analysts from 166 institutions engaged with the process and ‘opted-in’ for future communication and invitations etc, by confirming their desire to be included in National Grid’s ESG engagement programme. Most were from the UK and Europe, with a large minority from North America and other regions.
The results produced a comprehensive invitation list for National Grid’s ESG seminar, consisting of relevant individuals with a pre-confirmed interest in the event. Respondents were also asked to update their contact & / or assistant details at the same time.
Overview of market response to our research:
Objective 2: Establish current views regarding National Grid’s ESG policies and performance
The research clarified which topics investors and analysts were most keen to learn about - at both a market level and individual level. Company-specific environmental, social and governance topics were all ranked in order of ‘confirmed market interest’, so that the IR team were able to prepare the most relevant content in order to deliver a successful event.
Example priority subjects that investors and analysts are keen to learn about:
- Some topics stood out as being of greater overall interest to National Grid’s whole capital markets audience
- The research also highlighted the different emphasis placed by ‘ESG Specialists’ and ‘Investment Specialists’ on different topic areas - something for the communications teams to be aware of
- The level of market confidence in and satisfaction with National Grid’s current ESG policies & recent performance was tested - levels of confidence were mostly very high. However, the research also uncovered where future activities should be focused in order to address concerns and further support the positive understanding of National Grid as a responsible and sustainable business.
- The most influential sources of ESG research used by investors, their preferred reporting standards and chosen ESG incorporation strategies were also identified.
Together, this analysis has put National Grid in a good position to make sure that its ESG strategy and communications programme is well aligned with market interests and helped the firm to be better prepared for one-to-one engagements with investors and analysts.
Objective 3: Provide ‘planning intelligence’ for National Grid’s ongoing ESG investor engagement programme
In addition to the well-received launch event, this research enabled National Grid to identify high priority targets for subsequent ESG roadshows and seminars etc, by combining the responses received with additional ‘IR data’ and analysis. This enabled InterAxS Global, National Grid's roadshow partner, to develop and deliver a dedicated ESG roadshow.
‘ESG interest research’ has allowed National Grid to map specific areas of interest to key individuals, alongside an understanding of how this information is used to inform investment decision-making. Based on this, the company is planning a series of quarterly ESG roadshows and seminars, with prioritised themes and optimised invitee lists.
The reaction from the investor community to the research and subsequent launch has been very encouraging so far. It is clear that the ‘ESG interest research’ provided a firm foundation to work from and is an approach that should be considered by other companies.
For more information, please contact:
- Caroline Dawson, Investor Relations Manager, National Grid
- Charles Hamlyn, Managing Director, QuantiFire
- Cathy Norbury & Lucy Richardson, Co-Founders, InterAxS Global