Investor relations: working for a more sustainable market

By: José Antonio Martínez, Chief Executive Officer, Santiago Exchange Feb 2020

Environmental, social and governance (ESG) issues have become essential elements for sustainable market development. As a result, these matters are becoming increasingly important in how we do things, both for society and the business world.

In this context, Santiago Exchange’s relationship with investors and issuers has become key in promoting best practices and international standards in order to cultivate relationships built on trust. As part of that vision, Santiago Exchange has pioneered a series of initiatives in recent years designed to bolster the transparency of the Chilean stock market and improve the flow and dissemination of the data that listed companies provide their investors.

Concerned with generating debate and exchanging views around these issues, Santiago Exchange seeks to be a meeting place for the sector. One example of these efforts is the Investor Relations Committee, a discussion group launched in 2018 that helps strengthen relations with issuers by addressing the main international trends in securities markets in order to incorporate them into daily operations.

This committee has also been a very valuable opportunity for sharing experiences and airing concerns in order to improve the quality of information delivered to investors for decision making, to incorporate sustainability issues into corporate governance and, finally, to create value.

In other initiatives, Santiago Exchange launched a sustainability reporting guide to support issuers in preparing and publishing ESG-related information. This guide was developed in accordance with international standards and recommendations from the World Federation of Exchanges (WFE) and the United Nations Sustainable Stock Exchanges (SSE) initiative.

In its quest to promote sustainability in the capital market, Santiago Exchange has formed alliances with several institutions to disseminate content and professionalize the work of those who engage with investors, while improving governance. For example, it joined forces with Governart to offer the International Certificate in Investor Relations (ICIR), an internationally recognized qualification in investor relations (IR), which is considered an essential prerequisite for those entering the IR profession, and a valuable reference point for those who are already in the profession.

Aimed at becoming a financial center that attracts international issuers and investors, Santiago Exchange has also developed several technological solutions designed to help IR professionals deliver information to stakeholders and investors. The first tool, "Company Profile", increases a company’s visibility and helps attract more visits to the IR section of its corporate website. Santiago Exchange also created "Investor Link", which supplies investors with real-time information on the company’s stock price from their website, as well as complete and direct information on performance, latest transactions, ratios, graphs and prices from the last year. In addition, it recently launched a compendium that gives issuers access to all documentation and background information related to ESG management, such as integrated reports and local standard requirements, as well as a list of issuers included on the Dow Jones Sustainability Chile and MILA indexes, and a list of green and social instruments, among other information.

On the investor side, in alliance with the consulting firm EY, Santiago Exchange released the Guide to Responsible Investment. This document contributes to the understanding of responsible investment in the capital market and conveys the multiple benefits to investors of incorporating ESG issues into their investment decisions. It also describes how responsible investment is perceived in the Latin American and global context.

Along the same vein, Santiago Exchange and local investors issued a joint statement to promote responsible investment in the Chilean capital market. The statement was signed by pension funds Capital and Cuprum, and asset managers Banchile, BTG Pactual Chile, Compass Group Chile, Itaú, LarraínVial Asset Management, Moneda Asset Management, Principal and Santander Asset Management, urging Chilean companies to incorporate ESG issues into their operations as a way to ensure the sustainable development of their activities over time.

Through these and other initiatives, Santiago Exchange has become a fervent promoter of practices to improve corporate governance, care for the environment and generate a better quality of life for society in general. This ultimately results in more valuable organizations, since more and more investors want to add companies with strong sustainability management performances to their portfolios and are willing to pay a higher price to do so. At the end of the day, this translates into an opportunity for the country.