Overcoming Challenges: The Path to Successful ESG Program Implementation

While the adoption of environmental, social and governance (ESG) programs is becoming increasingly important for building a sustainable future, implementing such initiatives does not come without its challenges. Cost, ROI, engagement and clear messaging are just a few of the many factors to consider when it comes to corporate sustainability.

Below are some common concerns with commonsense solutions that may help companies better prepare for ESG deployment.

  • Capital allocation: Investing in and implementing ESG initiatives may require significant financing, which can be a hurdle for some companies, especially smaller organizations with limited resources. Not all ESG programs are costly, however. Starting slow and building a longer-term strategy over 2-3 years is good practice. It could be something simple, such as reducing a company’s carbon footprint by using energy-efficient lighting or adopting a hybrid workplace.
  • Complexity and measurement: Determining the right indicators, collecting reliable data and establishing standardized frameworks can be arduous. Companies can overcome this challenge by leveraging emerging technologies, collaborating with industry peers and engaging with ESG consultants and experts to ensure accurate and transparent reporting.
  • Benchmarking: It is important that organizations perform in a manner to maintain their performance, and at the same time, mitigate risk and capitalize on the potential benefits of sustainable business practices. Falling behind on these initiatives may lead to missed business opportunities. A good rule of thumb is to set realistic, achievable goals aside from regulatory obligations.
  • Stakeholder engagement: Balancing the diverse expectations of multiple audiences can be very demanding. Companies can use existing technologies to set up open communication channels with each of its targeted communities, from employees and investors to customers and suppliers. Social platforms can be used to garner support and to ensure that ESG programs align with stakeholder needs.
  • Integration and alignment: ESG programs often require changes to organizational structures, investment decisions and risk management practices. Since companies are constantly evolving, meaningful ESG practices can slowly and strategically be integrated into existing operations. What’s needed are leadership commitment, employee education and training and clear ESG goals that align with the company’s mission and values.
  • Regulatory environment: Compliance with multiple reporting frameworks and keeping up with varying regulatory and local jurisdictions often can lead to uncertainty. Engaging with policymakers, industry associations and subject matter experts can help companies stay informed and adapt their ESG programs to meet evolving requirements.

Today’s business and social climate are having a trickle-down effect on ESG. Large organizations, for example, are requiring smaller companies to adhere to ESG criteria as part of their global supply chains. Moreover, a growing number of institutional investors will not invest in companies without an ESG program in place.

Lack of standardization, inconsistent data quality and subjectivity are adding to the confusion when it comes to ESG. As a result, Bloomberg predicts more ESG-related shareholder lawsuits this year, which was highlighted in a recent Morgan Lewis webinar.  

Studies suggest that those companies embracing ESG will be competitive leaders and drive long-term value creation. ESG is not as complicated as it may appear. Deploying a program that does good – without breaking the proverbial bank – not only enhances brand reputation, but also will be well received among investors.

George Medici, gmedici@pondel.com

5 Common Misperceptions About Investor Relations

The age of myths, misperceptions and even dis-information is upon us, often pumped through the echo chambers of news media, social platforms and podcasts. The investor relations sector is not immune, with reality and perception not always being aligned. To help clarify any confusion, below are five common misperceptions.  

  1. Performance alone will impact stock price. Performance is just one of several factors that affect valuation. While a company’s financials are critical on Wall Street, that narrative must be conveyed professionally to investors and analysts, we well as to the business press. Gaining the right attention does not happen by itself and is another critical building block in attracting and retaining investor interest and ultimately enhancing valuation.
  2. The primary goal of a public company is to serve its customers. While serving the customer well usually leads to great financial performance, management teams and their boards should never lose sight of their primary mission, namely, serving the shareholders through enhancing value. Under federal law, corporate directors have a fiduciary duty to make decisions in the “best interests” of the shareholders, not customers, and to supervise management teams to make sure that happens.
  3. Share price is the only measure of true success. While share price is certainly an important metric – and perhaps the most important in shareholders’ minds – there are other factors that contribute to a company’s overall success, including revenue growth and profitability. Additionally, a company may have a strong underlying business but experience short-term fluctuations in share price due to external factors beyond its control.
  4. ESG is really not that important. While investors seek shareholder value principally through a company’s financial performance, environmental/social/governance (ESG) initiatives are becoming increasingly important to investors. According to PwC’s Asset and Wealth Management Revolution 2022 report, fund managers are expected to increase their ownership in ESG-focused companies to $33.9 trillion globally by the end of 2026, up from $18.4 trillion in 2021. Ownership of ESG-focused companies is on pace to represent 21.5% of total assets under management globally in less than five years.
  5. Investor relations is only about talking to investors and enhancing valuation. While investor relations is not listed in the Merriam-Webster dictionary, a simple Web search will reveal myriad definitions, far too many to list here. In reality, investor relations goes way beyond communicating with investors and enhancing valuation. Conveying a company’s mission and objectives, adhering to full disclosure, communicating transparently to multiple audiences and fostering sound media relations are just a few of the many areas that support a comprehensive, professionally managed IR program.

Chris Casacchia, ccasacchia@pondelwilkinson.com

3 Tips for Navigating Turbulence (Not Just on Airplanes)

As much as I hate to admit it, I am a nervous flier. 

Even though turbulence is “ordinarily seen as a convenience issue, not a safety issue,” it always makes my stomach flip while my hands grip the armrest until my circulation is nearly cut off. 

On airplanes, pilots can find smoother air by increasing or decreasing altitude. But what if turbulence occurs in other parts of your life, as in business? Can leaders steer the proverbial ship to avoid it? McKinsey & Company, one of the nation’s leading management consulting firms, provides some suggestions.

The last several years in the business community have been fraught with challenges brought on by the Covid-19 pandemic. More recently, inflation, rising interest rates and a bottle-necked supply chain have given rise to additional issues. One might argue that leading a successful business has never been harder. But there are several priorities to keep in mind to help manage through these, and other, secular trends.

First, according to McKinsey, have resilience. Resilience can be defined as “the ability of a system or organization to respond to or recover readily from a crisis, disruptive process, etc.”  Forbes says that, “Resilience is built by attitudes, values and behaviors that can be adopted and cultivated over time.” Not only will resilience help one manage a business under less-than-ideal conditions, but it is also a great example to set for employees, who play a key part in a company’s success.

Second, have courage. That may sound a bit “touchy-feely,” but it is exactly what may be needed to effectively manage through difficult times. The knee-jerk reaction is to pull back and wait things out, but what if adapting to the situation, instead, and powering forward is really the best course of action? 

In our organization for example, we must apply and impart courage to the practice of investor relations and strategic public relations in a down market and when economic conditions are tenuous. We strongly believe that hiding when things are tough is the wrong decision. As our (courageous) CEO Roger Pondel said during an interview with SNN, “… communicating with current and prospective investors during bear markets may at first seem counterintuitive … but investors are eager to invest in solid companies at perceived bargain prices.” Shining a light on why your company deserves to be looked at can give you an advantage against those that are hiding their heads in the sand.

And finally, have trust. Easier said than done, but if a plan is being implemented (like a transatlantic flight plan), it’s important to realize that a team of professionals weighed the challenges and put together a strategy designed to achieve whatever goal set. Like arriving to London from New York safely.

Trusting employees also is good practice. For example, Covid necessitated remote working, and many companies went virtual on a permanent basis. Even as the pandemic began to abate, employees embraced this new way of life, expressing a desire to work from home. 

According to McKinsey, “flexibility is the new amenity employees want—especially those in diverse groups—and will embrace if you offer it.” Businesses that support the idea that people are their greatest asset, generally achieve better outcomes than those that don’t. A Harvard Business Review study noted “… companies that successfully transformed themselves shared a common focus on initiatives that prioritized employees.”

As we all work to optimize our businesses or life itself, it’s a good idea to take a step back and think of solutions through the lens of how we can deliver a great outcome. Airplane pilots do just that every day.

Laurie Berman, lberman@pondel.com

As the New Year Rolls In, So Do the Prognosticators

It probably happens every year, but I cannot recall a time when so many pundits had so many opinions on how the market will perform in 2023. The funniest headline about the market’s near-term future was JP Morgan’s, “The End of the Affair.” It probably was written to catch attention, and in my opinion would have been more appropriate a year ago, referring to the bull market prior to last year’s downturn.

How do you think the market will perform in 2023?

Many of the headlines about the new year are positive and include such language as:

  • “Three Scenarios that Could Surprise Markets (on the upside) in 2023”
  • “Is a Stock Rebound in the Cards?”
  • “Inflation will Crash Much Faster than Expected”
  • “Comeback for Fixed Income”
  • “Economy will Avert Deep Recession”
  • “Fed Pivot Could Push Stocks Up by End of Year”
  • “Second Half of Year will be Up, Up and Away”
  • “S&P will Soar at Least 20%, Nasdaq at Least 30%”
  • “Fed will Pause Rate Hikes Sooner than Everyone Thinks”
  • “The Stock Market will have an Excellent Year”

But there also are naysayers:

  • “Wall Street, Meet Mud”
  • “A Strange Day is Coming to America”
  • “More rate hikes are coming”
  • “Stocks will continue their lows in 2023”
  • “Continued Volatility Ahead”
  • “Markets May Continue to Face Choppiness”
  • “Challenges Abound for Dow”
  • “A Stock Market Crash in 2023”
  • “Millionaires Predict the Market Will Get Much Worse”

With so many divergent views, what’s an investor or issuer to think, or more importantly, to do? Who should be believed?

I just counted the number of bullet points above, and there was one more positive than negative. A good sign, although I am not an analyst and my research was cursory at best. However, the sources are good and professional.

If you really want a forecast for 2023, you could always flip a coin.

Friederike Fabritius and Hans Hagemann wrote in in their book, The Leading Brain: Neuroscience Hacks to Work Smarter, Better, and Happier, that if you’re satisfied or relieved by a decision the coin made for you, then go with it. On the other hand, if the coin toss leaves you uneasy, then go with the other choice instead. “Your ‘gut feeling’ alerted you to the right choice,” they wrote.

So please, flip a coin if you will, but at least think positive thoughts. Good luck, and have a healthy, happy and prosperous new year.

Roger Pondel, rpondel@pondel.com

5 Unconventional Reasons Why Hire a Public Relations Firm

Different sized companies, private or public, have varying needs when it comes to corporate communications. Whether it is to help message a crisis, improve shareholder value or build brand awareness, engaging a public relations firm may often seem like a no brainer.

It’s also important for any organization to look beyond the obvious to assess opportunities or even threats that may impact business goals. Think of it like a self-tune up that asks the fundamental questions, “What if …” and “What can we be doing better?”

Most small and middle market companies do not have their own communications departments able to perform self-assessments. Using an outside firm may be a good alternative, which also can provide a unique, objective perspective on existing strategies.

As organizations plan for 2023 and beyond, it may be worthwhile to consider these five unconventional reasons for engaging a corporate pr agency:

  • Perception doesn’t match up with company’s values. Media and investor audits, as well as customer and employee surveys, can be very helpful in gauging sentiment. Using a pr agency as facilitator is ideal for determining unbiased feedback that can be translated into effective communications programs.
  • Can’t tell the bigger story. Today’s CEOs, CFOs and CMOs must navigate myriad landscapes that have their own unique sets of challenges. Clearly defining target audiences from Main Street to Wall Street will help ensure message delivery. However, knowing what to say, when and how to say it will move the proverbial needle.
  • Too busy. Organizations have great ideas but don’t always have the bandwidth to successfully implement communications campaigns. While finding a good firm may take some extra time, consider one that can do the “heavy lifting” and free up internal marketing and investor relations resources.
  • Don’t hear the word “no” very often. While a communications firm should be an advocate and supporter of a company’s vison, it is important that the pr firm does not drink the proverbial Kool-Aid. A heathy debate on strategy and tactics will always yield better results.
  • You got this. Like most corporations, good public relations firms, too, should always be learning. We need to be aware of new technologies and strategies, as well as stay up to speed on latest marketing and communications platforms that are constantly evolving. Select a firm that can add both tangible and intangible value to any company, brand or organization beyond its internal capabilities.

Establishing or enhancing share of voice can be a monumental task for any sized organization in today’s crowded, very noisy marketplace. All that’s needed is the right public relations firm with the savvy to develop a cogent strategic approach, mixed in with good ole’ fashioned “out of the box” thinking.

George Medici, gmedici@pondel.com

PondelWilkinson Profiles: Janet Simmons

Every company has that one person who is the “glue” that keeps everyone and everything running smoothly. Janet Simmons is that person at PondelWilkinson. Entering her 15th year at the firm, we asked the Los Angeles native some questions about her professional and personal life as part of our ongoing Q&A series. 

What was your first job?

It was with Bell Industries, working at their manufacturing facility in Burbank. I started out on the plant floor and ended up in the front office, working with the CEO and CFO on corporate communications and administrative matters. Stayed there for 34 years.  

Janet Simmons with Los Angeles Mayor Eric Garcetti.

How long have you been in the industry?

The last 15 years of my career have been with PondelWilkinson. I joined the firm right after I left Bell Industries, which ironically was one of PondelWilkinson’s first investor relations clients. I already knew and loved everyone at the firm, so the transition was seamless. 

If you had to pick one word to describe what you do, what would it be?

Variety. I cover everything … from administrative duties to preparing quarterly analytical reports for clients, issuing press releases, updating websites and more. 

What is your favorite part about your job? 

I would have to say it’s interacting with people. I enjoy working with everyone at PondelWilkinson and with our clients. Even though we are working remotely these days, we always find time to stay connected and enjoy a laugh or two. 

What is your least favorite part about your job?

That’s a tough one. I really enjoy all that I do here, but I’m not a big fan of tight deadlines. I know it’s part of the job, but short turnarounds can be very stressful at times. 

What do you like to do for fun?

I love gardening, hiking and going out with friends.

What’s the weirdest thing you’ve ever done?

My husband and I recently went on a “Jeep safari” in Moab, Utah. While navigating the Hells Revenge trail, we started to climb a super-steep Lion’s Back, when I jumped out of the moving car and walked back down the hill. I don’t know about being the weirdest, but it definitely wasn’t the smartest thing I ever did. 

What’s something that recently made you smile?

The other day I noticed a squirrel in my backyard trying to get my attention. He was looking at me through my kitchen window, as if to say, “Hey, the bowl is empty, are you going to fill it?” I literally laughed out loud because the squirrel was so animated. Needless to say, I filled the bowl with food, smiling the entire time. 

What’s next on your bucket list?

Washington, D.C. 

What’s the best advice you’ve ever heard?

That would have to be from my dad, who often said, “Better to be early than late.” Simple advice, but something I live by in everything I do. 

— Shannon Clemons, sclemons@pondel.com

PondelWilkinson Profiles: Judy Sfetcu

This month marks Judy Sfetcu’s 25th anniversary at PondelWilkinson. Our longest tenured staff member, Judy oversees a host of firm functions, as well as managing several investor relations accounts, including Monster Beverage, which has been a client for more than two decades. We caught up with the firm’s vice president in our ongoing Q&A series to learn a little more about her personal life and some of the experiences that have shaped her career.

Pictured during her last trip to Chicago, Judy Sfetcu had the pleasure of stopping by the SkyDeck to overlook the beautiful city. 

What was your first job?

Passing out menu flyers for restaurants. I just turned 17 at the time and moved to New York City from South America about a week prior. My next job was scooping ice cream at Baskin Robbins. Much more fun.

How long have you been in the IR industry?

Twenty five of my 27 years have been at PondelWilkinson. I spent my first two years working for a publicly traded apparel manufacturing company, which piqued my interest and passion in investor relations.

If you had to pick one word to describe what you do, what would it be?

Multitasker. Hands down the best word that describes me and encompasses my job. I’m pretty much a jack of all trades at the firm, from working with the investment community on behalf of investor relations clients, to planning, accounting and human resources for PondelWilkinson. 

What is the favorite part about your job?

Learning about all the different types of businesses we represent, how they operate and how we help companies maneuver through the investor landscape. This gives me a plethora of knowledge about different industries, management styles and achieving success

What is the least favorite part about your job?

I would have to say managing quarterly reporting schedules. Most public companies report earnings around the same timeframe, and sometimes, clients report results on the same day. Life becomes super hectic during earnings season.

What do you like to do for fun?

I enjoy traveling, dancing and attending the theater. Living in Los Angeles provides plenty of options to keep me entertained and happy.

What’s the weirdest thing you’ve ever done?

I know it may sound odd, but I don’t do weird things, although I’m quite adventurous when it comes to food. My most recent trip to Philadelphia had me eating authentic sautéed snails!

What’s something that recently made you smile?

About a month ago, I saw a butterfly in my backyard struggling to fly. It kept bumping into things. I went outside to see if I could pick it up and noticed its legs were stuck together with some type of lint. I was able to remove the string-like material, and happily, I watched it fly away. It was one of the most beautiful butterflies and being able to help it put a smile on my face.

What’s next on your bucket list?

Traveling back home to visit my family in Taiwan for Chinese New Year, Asia’s most celebrated season. I haven’t visited my family for almost four years because of Covid. I am super excited, since it has been so many years since I properly and traditionally celebrated Chinese New Year. Looking forward to the Year of Rabbit on January 22, 2023.  

What’s the best advice you’ve ever heard?

“Forgiveness is really for yourself, not the person you are angry with.” I am not sure where I originally heard that, but often the person who angers you is unaware of your feelings. I’ve learned that it’s best to let go, otherwise these emotions will only hurt you in the end.

— Shannon Clemons, sclemons@pondel.com

PondelWilkinson Profiles: Laurie Berman 

PondelWilkinson’s investor relations teams play an important role helping publicly traded companies position themselves to Wall Street. We caught up with Laurie Berman, the firm’s managing director, who shared more about her IR work, personal life and some of the factors that have influenced her career.  

What was your first job?  

My very first job was at a snack bar in a roller-skating rink. Professionally, my first job out of college was working at Institutional Investor magazine in their sponsored conference division.

Laurie Berman, PondelWilkinson’s managing director, pictured with her loving dog, Mishka, as they enjoy the Los Angeles sun.

How long have you been in the industry?  

I’ve been practicing investor relations for almost 30 years (I guess I started when I was still in diapers).

If you had to pick one word to describe what you do, what would it be?  

Fast-paced (that’s one word, right?).

What is your favorite part about your job?  

I love storytelling. It’s so important to be able to find the right words to describe a company and its strategy.

What is your least favorite part about your job?  

Deadlines. Although I work great under pressure, it’s sometimes tough to juggle multiple deadlines at the same time. I’m proud to say I’ve never missed an important one.

What do you like to do for fun?  

I love sports (the spectator kind).  Right now I’m very into football and I am a rabid fan for my NY Giants.  Baseball is also a love of mine, but I switched my allegiance from the NY Mets to the Los Angeles Dodgers when I moved to Los Angeles more than 20 years ago.  I still do root pretty hard the New York teams of my childhood.

What’s the weirdest thing you’ve ever done?  

I allowed a very persistent relative to convince me to go on a date with someone I briefly dated five years before (it didn’t work out at the time). We’ve now been married for almost 26 years, and that relative was a flower girl at my wedding (she was in her 50s at the time).

What’s something that recently made you smile?  

A few months ago, we rescued an 8-year-old dog with vision problems. She makes me smile all of the time because she’s such a goofball.

What’s next on your bucket list?  

Aside from winning the lottery? I’d love to take an extended vacation through Europe.

What’s the best advice you’ve ever heard?  

Not so much advice, but something I try to take to heart. “Comparison is the thief of joy.”

— Shannon Clemons, sclemons@pondel.com