Is your corporate website helping move the ‘valuation’ needle for your company?

Is your corporate website helping move the ‘valuation’ needle for your company?

Biswadeep Gupta 03 December 2019 4 min read

The annual E&Y survey of global institutional investors identifies a company’s website as a crucial research tool to understand non-financial disclosures or ESG parameters for investment decisions.

For most of us, the corporate website is a one-off creative platform for either product display or customer acquisition (e-commerce). For public companies, it is a one-time digital asset for brand building alongside statutory company disclosure (IR).

Recent research shows that the corporate website is becoming a tacit, dynamic ‘research tool’ for global institutional investors. From determining a company’s non-financial (soft) assets to ESG (Environment, Social & Governance) efforts, it goes a long way in influencing investment decisions. Other self-publishing tools like Integrated Annual Reports, Sustainability reports and social media channels of the company also have an impact on ESG parameter evaluation.

The annual E&Y 2018 survey of Institutional Fund Managers on investment perspectives of ESG or non-financial reporting mentions that over 73%* feel the corporate website is useful to understand non-financial disclosures of a company when taking investment decisions. Moreover, they regularly visit the website to understand the non-financial behaviour of the company directly rather than accessing it from third-party sources.

In an increasingly low trust world, a corporation’s conduct is becoming equally important as its performance. As the old saying goes, the journey to reaching the top is equally or maybe more important than reaching the top.

Is your corporate website helping move the ‘valuation’ needle for your company?
*Source: E&Y Report — How useful do you find the corporate website as a source of non-financial information when making an investment decision?

Today, the key challenge with ESG parameters across the globe is that there is no standard comparative measurement or metric as in the case of financial numbers (AS accounting standards). While individual progressive companies have begun to report ESG parameters (integrated reporting in place of traditional annual reports), it is neither comparable to any industry benchmark nor is the measurement standard between two companies. Hence such reporting is often considered neither investment grade nor consistent.

ESG parameters will be evaluated and measured in qualitative terms until standard quantitative metrics are available. This makes the corporate website a vital tool for companies to share their non-financial performance in a dynamic yet transformational way.

Regulators, governments and professional bodies worldwide are working to create global standards for ESG. In the meantime, ESG and non-financial conduct of a company are becoming more critical for investment decisions across the investor eco-system — start-ups, private or IPO ready or public companies and even M&As. In this milieu, investors are silently accessing the corporate website to understand the founder & the company’s culture, behaviour and commitment. As research shows, fund managers are high on morals than we think.

So, can a corporate website narrate the ESG performance parameters of the company, or is it more of academic talk? Let me share a few best practices from corporate websites:

  • Stating and updating the company’s business strategy vis-à-vis changing market dynamics and competition is critical to showcase future readiness.
  • A message from the leader that speaks about intent, integrity & innovation builds long-term trust among stakeholders.
  • Neutral, unrelated, yet useful content can help your target audience (without any selling bias) build a sense of thought leadership, community and care.
  • Customer case studies can demonstrate an ‘empathy centric’ commitment.
  • The people philosophy should transcend every human life that it touches be it as an employee, vendor, customer or community.

Every corporation should first identify its key growth levers (moats), perception challenges and industry opportunity to build a strong digital asset.

Piecemeal efforts will be easily dismissed as dishonest by the readers.

A key finding of this year is that ESG parameters are becoming critical from a compliance and risk management perspective, with the earlier year’s use of ESG levers for PR & Marketing becoming less compelling.

The corporate website can become a research tool for companies to continuously feed and guide stakeholders on their business readiness, especially on the above parameters.

The findings should be an eye-opener as you may be losing an opportunity to address the stakeholders who research your website. In today’s discerning investment scenario, they are important. And in a connected world, ‘institutional’ investors or ‘analysts covering your stock’ whom you convey all information on a ‘one to one’ basis, maybe a misnomer as a much larger universe of stakeholders — be it global investors, HNIs, family offices, competitors, JV partners, M&A players, regulators, governments, NGOs and even leadership talent are viewing your website through a search for ‘value discovery’ . Why miss the opportunity?

It is time to take a fresh look at your corporate website. Ask yourself, does your website narrate your (non-financial) value creation story regularly? When have you last updated any strategic information on your website (not adding the next branch address or new product / TVC launch)? If the answer is frequently, pat yourself on the back and continue doing good work, or else, be honest and revisit your corporate website strategy. Most corporate websites after the initial launch get into a static mode.

The United Nations-supported Principles for Responsible Investment (PRI), an international network of investors are working together to put the six UN ESG principles into a globally accepted measurable standard that can be input as financial metrics soon. Till such time, ESG and non-financial performance parameters will continue to be demonstrated in an honest, effective, yet storytelling manner.

And what better place to do it than your corporate website?

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