The Institutional Investor Industry Engagement (IIIE) Project is designed to accelerate sustainability practices within industries by improving communication between institutional investors concerned with sustainability integration and the companies and industries they invest in.

Efficient communication between institutional investors and companies on ESG issues is currently hampered by several factors. These include:

  • Lack of alignment and constructive dialogue with investors around the most material ESG issues. This is further complicated by the lack of industry normative standards and the many competing frameworks and standards on ESG currently in use, the vast majority of which do not focus on material factors of concern to investors
  • Fatigue over proliferation of surveys and questionnaires from rating companies, at times promulgating inaccurate information
  • Lack of capacity of most large institutional investors, particularly index investors, to communicate and engage beyond a small group of individual companies in their portfolio. This is also the case in collaborative engagements when groups of institutional investors come together. The focus is usually on a few companies rather than an entire industry.

To address this challenge, the IIIE Project’s goal is to bring together leading institutional investors with leading companies within in a specific industry and, as appropriate, their industry associations, to develop a shared, forward-looking understanding of the future of the industry and the sustainability challenges it may face. Working from this analysis, the objective is to develop a practical and efficient framework for companies to communicate with investors on ESG integration and performance.

A secondary objective is to explore the potential for institutional investors to support leading firms in addressing “first mover” ESG issues for the industry. Unlike general governance issues such as board diversity, social and environmental issues tend to be context- and industry-specific (for example, deforestation and real estate, water and food & beverage, etc.). Not only is it difficult for individual companies to tackle these issues alone, but the costs incurred in doing so individually can put them at a competitive disadvantage with peers who are not equally engaged.

Bank Investor Engagement Project

In 2021, HMI partnered with Tapestry Networks to launch the Bank Investor Engagement Project (BIEP). The project brings together senior executives and board members from leading institutional investors and banks to engage in bilateral discussions and roundtable meetings to clarify priorities, expectations, and challenges and identify good practices for improving bank communications on ESG issues.

Participating institutions include BlackRock, Bank of New York Mellon, BBVA, Citi, Fidelity International, Hermes, HSBC, JPMorgan Chase, Morgan Stanley, PNC, RBC, Truist and UBS.

BIEP Resources:
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BIEP ViewPoints: Improving climate transition planning communications (June 2022)

On June 22nd, BIEP participants met virtually to to discuss investor expectations regarding bank climate transition plans, and what effective communication and engagement on climate transition entails. Discussions highlighted that investors are looking for both more specifics about implementation plans and interim targets, but also greater transparency and candor about the challenges in achieving them.

Project Partner:

 

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BIEP ViewPoints: Assessing purpose and culture in banking (January 2022)

On December 3rd, BIEP participants met virtually to discuss how banks and their boards think about purpose and their role in addressing issues like climate change and diversity, equity, and inclusion. Participants explored how purpose is embedded into their firms’ culture and monitored on an on-going basis. Investors also provided perspectives on how they assess bank culture and how they would like banks to more effectively communicate about their approaches to purpose and culture. This ViewPoints synthesizes perspectives emerging from the session and discussions in preparation for the meeting on December 3rd.

 

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BIEP ViewPoints: Improving bank-investor ESG communications (July 2021)

On June 9th, executives from among the largest banks and institutional investors met virtually to discuss how ESG communications between banks and investors can be improved and the opportunities and challenges to progress as part of the Bank Investor Engagement Project. This ViewPoints synthesizes perspectives emerging from that discussion and discussions in preparation for the meeting on June 9th.

Additional Resources:
Governance of Banks: A Summary of Findings – PowerPoint
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Purpose Statements: A Summary of Findings – PowerPoint
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Banking Initiatives: Current State of Play – PowerPoint
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Assessment of Participating Banks – PowerPoint
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Assessment of Lobbying – PowerPoint
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Biopharma Investor ESG Communications Initiative

In 2018, HMI launched the first prototype for the IIIE Project with the biopharma industry, working with the Biopharma Sustainability Roundtable. The goal of the project was to address the common interest of leading biopharma companies and investors in achieving more effective, efficient and decision-useful communications about the sector’s most important environmental, social, and governance (ESG) topics.

In March, 2022, the Roundtable released the Biopharma Investor ESG Communications Guidance 4.0, an updated resource to guide strategic thinking about biopharma-investor ESG communications. The latest Guidance is informed by the ongoing biopharma-investor dialog, is enriched with key stakeholder input, is improved by use case experience, and is compatible with the fast-evolving global ESG reporting landscape. In addition to the ongoing biopharma-investor dialog, an outreach and engagement process with an ever-expanding group of stakeholders continues to inform the initiative’s work.

Resources:
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Biopharma Investor ESG Communications Guidance 4.0 (March 2022)

This Guidance aims to contribute to effective and efficient ESG communications between companies in the biopharma sector and investors. It has been developed primarily to help companies communicate their ESG narrative, including strategy, governance, risks, opportunities, and performance, in a well-structured and comparable manner.

Project Partner:
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Biopharma Investor ESG Communications Initiative Flyer (March 2022)

An overview of the goals, structure and evolution of the initiative, updated to reflect recent progress and developments.