Perhaps nothing has been transformed more by the digital age than the way people invest in publicly-traded companies.
Paralleling these developments are dramatic changes in investor expectations around corporate performance and disclosure.
Changing times
Twenty years ago, profitable companies could placate investors with basic financial detail, an annual report with distinguished board of director portraits, and a shareholder meeting complete with free coffee and sandwiches.
Today such investor laissez-faire is out of the question. One reason is eroding public trust in business, combined with widespread suspicions that senior managers aren’t always acting in the investors’ interest.
Scrutiny intensifying
Increased institutional investor scrutiny of companies’ social, economic and environmental impacts is another. This has been influenced by the major banks with such protocols as the Equator Principles, which apply World Bank and International Finance Corporation (IFC) standards for assessing social and environmental risk to private bank project finance.
Also pointing the way to an unstoppable trend are moves by regulators to require public companies to publish increased analysis on environmental and social performance.
No longer is such scrutiny the sole preserve of socially responsible investors (SRI). SRIs continue to set the most demanding standards and put their money where their mouth is by refusing to invest in certain types of companies. Tobacco, gambling, firearms and pornography are typical no-go areas.
Tough questions
With intense focus on oil sands development, operators such as Suncor receive more than their fair share of tough questions from those investing in oil, especially about the environmental impacts of activities.
It would be tempting for oil sands companies to see this demand for ever more information as an irritant, if not simply intrusive. But we realize that investor interest in environmental plans and performance of our sector can only be a good thing. For not only do investors have a right to understand the businesses in which they invest, but their tough questions help us to keep corporate social responsibility and sustainability standards high and ensure we continue to meet the expectations of all our stakeholders.
