Investor Relations and ESG Reporting in a Regulatory Perspective: A Practical Guide for Financial Market Participants

by Poul Lykkesfeldt, Laurits Louis Kjaergaard

Overview

Investor Relations and ESG Reporting in a Regulatory Perspective is a comprehensive and detailed practical guide for financial market participants, focusing on the stock market, written for practitioners by practitioners. The main themes of the book include the challenging integration of investor relations (IR) and the non-financial reporting of environmental, social and governance (ESG). Further, the book provides a comprehensive overview of the complex regulatory framework of the European Union (EU) related to the financial markets, including the expected global trends in this area. This includes financial legislation such as MiFID II, MiFIR and MAR along with non-financial legislation like the EU’s taxonomy, CSRD and SFDR. In addition, this book explores the non-financial reporting standards of GRI, TCFD, CDSB, IBC, SASB, IRRC and the upcoming ISSB, and discusses the UN’s Sustainable Development Goals (SDGs). In addition, the book provides a practical guide regarding IR inspecial situations, e.g. in connection with takeover response manuals, M&A, investor activism, initial public offerings (IPOs), as well companies’ collaboration with e.g. investment banks and corporate finance advisers, financial PR and IR advisers in such situations. The suggested audience of the book includes board members and senior management of in particular listed companies, and companies considering an IPO; professionals working in the fields of IR, ESG and communications; institutional and retail investors; private equity executives; venture capitalists; investment bankers; legal practitioners; accountants and auditors; financial journalists; and politicians. Finally, university and business students may benefit from an insight into the dynamics of the financial markets and the direction they are moving, a possible inspiration for choosing a future career. 

Product Details

ISBN-13:	9783031058004
Publisher:	Palgrave Macmillan
Publication date:	08/15/2022
Sold by:	Barnes & Noble
Format:	eBook
File size:	38 MB
Note:	This product may take a few minutes to download.

About the Author

Poul Lykkesfeldt is managing partner, senior adviser and founder of Reliance A/S, a leading Danish financial PR and communications firm with an international client base. Poul has over 35 years of experience in the fields of investor relations, financial transactional PR, investor activism, corporate/ESG communication and media relations related to listed and private companies, and private equity firms. Poul has previously served as head of IR, and deputy head of corporate communications, of Novo Nordisk; as a top-rated senior equity analyst with ABN AMRO; and as an investment banker and corporate finance adviser in London (UBS) and Copenhagen (KPMG Corporate Finance). Today, Poul advises international and domestic clients within financial PR/IR in connection with transactions, annual reports and ESG reports, as well as crises communications and media relations/training. Finally, Poul is a trusted adviser for company boards and the C-suite. Poul holds a M.Sc. (Econ.) from the Copenhagen Business School, Denmark, and a PED from IMD, Switzerland.

Laurits Louis Kjaergaard is strategy and business development manager at I&T, one of Denmark’s most prominent independent asset managers. Having lived in six countries, Laurits has held finance and consulting positions at leading buy-side, sell-side, and regulatory advisory firms, including ABG Sundal Collier, PwC, Interogo (Inter IKEA Holding) and Danske Bank. During his career, Laurits has both worked with and prepared traditional company equity research, as well as ESG research reports, on listed companies in his earlier capacity as an equity research analyst. Prior to this, he advised companies on the implementation of selected EU legislation. Laurits holds a M.Sc. (Finance) from the University of Liechtenstein, a B.Sc. Business and Sociology from the Copenhagen Business School, Denmark, and a finance certification from the London School of Economics.

Table of Contents

Introduction.- Section 1: The financial markets: An overview.- Chapter 1.1: The benefits and drawbacks of a stock market listing.- Chapter 1.2: The formation of stock prices.- Chapter 1.3: Ethics in the financial markets – why a solid IR framework is key.- Chapter 1.4: Understanding valuation methodology of the financial markets.- Chapter 1.5: Integrating ESG in equity research.- Chapter 1.6: Valuation methodology from the perspective of different investor types.- Section 2: The participants of the financial markets.- Chapter 2.1: Understanding the financial markets' stakeholders and their motivation.- Chapter 2.2: Understanding the role of institutional investors.- Chapter 2.3: How to communicate with retail investors.- Chapter 2.4: The sell-side/equity analysts, brokers and corporate access.- Chapter 2.5: Corporate finance advisers.- Chapter 2.6: Considering the role of non-financial markets stakeholders.- Section 3: Major legislation themes related to the European financial markets.- Chapter 3.1: How is legislation implemented on the European financial markets?.- Chapter 3.2: Learning from the impact on financial markets of recent legislation.- Chapter 3.3: How to optimise IR within the existing legal framework.- Chapter 3.4: The new wave of ESG regulatory framework.- Section 4: Achieving a fair valuation of the company through best-practice IR.- Chapter 4.1: The IR function.- Chapter 4.2: Deciding on IR ambitions and its success factors.- Chapter 4.3: IR within the organisation.- Chapter 4.4: IR’s responsibilities of implementing policies and planning ahead.- Chapter 4.5: IR tools to engage a company’s stakeholders.- Chapter 4.6: Managing the expectation of the financial community.- Chapter 4.7: Embracing the digital world of IR activities.- Section 5: IR in special situations.- Chapter 5.1: Preparation of difference types of IR-related contingencies.- Chapter 5.2: Developing a take-over response manual.- Chapter 5.3: Valuation in a takeover situation and strategic alternatives.- Chapter 5.4: Shareholder engagement and monitoring market activity.- Chapter 5.5: Investor activism.- Chapter 5.6: The company – before, during and after an IPO.- Section 6 Embracing non-financial/ESG reporting.- Chapter 6.1: The origin of ESG.- Chapter 6.2 Stakeholder capitalism and sustainable leadership.- Chapter 6.3 Institutional investors are embracing ESG strategies.- Chapter 6.4 Consideration sustainable finance disclosure regulation (SFDR).- Section 7 The framework of best-in-class non-financial reporting.- Chapter 7.1. Implementing taxonomy.- Chapter 7.2. Implementing non-financial reporting standards.- Section 8 Preparing the company’s first ESG report.- Chapter 8.1. For the first non-financial report: a checklist to get into gear.- Chapter 8.2. The importance of mobilising ESG with incentives.- Section 9 Aiming for best-in-class ESG reporting.- Chapter 9.1: Taking already implemented non-financial reports a step further.- Chapter 9.2: Encompassing ESG rating agencies.- Section 10 Future trends of financial and non-financial reporting.- Chapter 10.1: Best-practice IR is about being at the forefront.- Chapter 10.2: Is the next decade scary or exciting?.- Postscript.- Summary of facts and best practice.- Overview of Nasdaq’s ESG reporting guidelines.

What People are Saying About This

From the Publisher

Testimonials and Endorsements:

“All board members have a fiduciary duty to act on behalf of a company’s shareholders and other stakeholders – this includes embracing today’s significant developments within ESG reporting. This book provides an excellent and competent overview of the challenges that senior management and boards are facing today relating to new ESG reporting requirements. Further, it integrates the fields of ESG reporting, non-financial reporting, financial reporting and investor relations in a most helpful manner. It is evident that the authors are seasoned practitioners in their fields. This book is recommended as mandatory reading for board members; senior management; IR, ESG and communications executives; external advisers within ESG and IR; as well as relevant politicians; in respect to the ongoing journey of ESG reporting and the mobilisation of the UN’s Sustainable Development Goals. I offer this book my highest recommendations as relevant and newsworthy reading regarding companies’ and institutions’ continued journey in pursuing the ESG agenda and meeting the increasing demands of investors regarding high-quality ESG reporting.”

—Lise Kingo, Independent Board Director in Sanofi SA, Covestro AG and Aker Horizons ASA. Former CEO and Executive Director of the United Nations Global Compact; and prior to this, Executive Vice President and member of Novo Nordisk’s Executive Management

“I doubt that a more insightful and practically-oriented handbook has been written, or may be written over the next decade, on the subject of investor relations, not only providing an essential overview but also illustrating how IR is executed in a best practice manner. This book integrates IR and ESG reporting, which is essential for global investors today. Further, this book cast light on companies’ interaction and collaboration with investment banks and financial advisers, which is critical for any company - particularly small and medium-sized companies and in situations of an IPO, private equity or a venture capital journey. I strongly recommend this book to any board member, senior management, IR and ESG practitioner, as well as founder, IPO or capital raising candidate, who wish to increase their knowledge of the financial markets and appreciate how a company may effectively mobilise resources to satisfy its shareholders and stakeholders. This book also provides a competent ‘down-to-earth’ overview on relevant EU financial market regulation, as well as a checklist to increase transparency and reduce a company’s risk premium to improve its capital structure and reduce its funding costs.”

—Carsten Borring, Associated Vice President Global Listing, Nasdaq. Member of The Federation of European Securities Exchanges (FESE) Listing Expert Group. Former board member of the Danish Centre for ESG Research and the Danish Government’s Panel for Entrepreneurs

“The EU regulatory wave towards the financial and capital markets has been significantly increasing over the past 10-15 years. Understanding the legal framework is a prerequisite for boards, senior management and company executives to navigate as a listed company. Failing to comply may have longstanding negative consequences. This book goes beyond simple regulatory analysis and provides an accessible and balanced overview of the increasingly complicated regulatory framework on the EU financial markets in terms of listing obligations, as well as financial and non-financial reporting, which any business leader or financial market practitioner may benefit greatly from. Further, this book provides a useful overview of the future trends in the EU regulatory area of financial and non-financial reporting, also in a global regulatory context. I take pleasure recommending this book to any stakeholder with an interest in the EU regulatory framework related to the financial and capital markets, including to companies and investors outside the EU who wish a competent EU regulatory overview.”

—David Moalem, Partner, Ph.D., Bech-Bruun law firm, Capital Markets & Financial Institutions Team; Former Partner and National Head of Legal Services at Deloitte, and has held a wide range of official appointments in the Danish government’s and Danish FSA’s working groups for EU financial regulation 

“The authors provide unique and incredibly insightful practical information and recommendations for IROs and Executive Management teams in listed companies regarding organising and executing best practice IR. The combination of simple and straightforward information, and its many layers of solid theoretical understanding and real-life examples, makes this book invaluable for both the experienced and the newly started IRO. It serves as a practical checklist in the daily dealings with investors and equity analysts. This includes optimising the resources of IR and IR performance; creating an IR department; overview of relevant IR tools; the increasing importance of retail investors and digital IR; and illustrating the execution of perception studies among equity analysts and institutional investors which the authors refer to as perhaps the most underrated IR tool. Finally, this book provides an excellent detailed guide to creating a takeover response manual and considerations regarding investor activists, including the use of external advisers; the implications of relevant major EU regulations; and how to practically conduct ESG reporting, both for beginners in the field, and for experienced companies. This book is, in every manner, highly recommended.”

—Michael Bjergby, Senior Vice President, Head of Group Finance, ISS A/S. Former Head of Investor Relations at ISS, Pandora and GN Group