IBX 2022: A Snapshot of Brand Strength Across the ASX 200

Companies that communicate better, perform better in the long run.

While its primary focus is on investors, and how effectively companies engage with them to build trust, the IBX also recognises that investors are increasingly sensitive to – and influenced by – the policies and behaviours of other groups including employees, customers and communities, as well as proxy solicitation services and ESG agencies.

The IBX is a highly effective lens through which to analyse the value of the corporate brands of Australia’s leading companies: for the past five years, an equally weighted portfolio of the top 20 IBX companies has outperformed the S&P/ASX 200 by a ratio of 2:1.

Methodology

The IBX is produced by corporate brand and communications agency Designate in partnership with Morrow Sodali. To provide a nuanced and balanced picture of overall corporate engagement, it takes a wide range of criteria into consideration across three critical dimensions:

The quality of public efforts to communicate with investors and other stakeholders through key touchpoints such as annual reports, corporate websites and results presentations.

Communication of ESG strategy and performance through sustainability or ESG reporting, considering elements such as goals and targets, alignment to recognised frameworks, and AGM resolution voting records.

The market perception score provides a more financially informed assessment of how a company is perceived by investors, analysts and other observers based on commonly used and publicly available financial indicators.

Morrow Sodali is a global leader in corporate services relating to ESG, and this year’s IBX features a complete overhaul of the ESG score. Evaluation of this key metric has changed both in terms of its relative importance (up from 15% weighting) and the criteria used, so as to better identify good practices that are reasonably comparable across companies of different sizes and sectors.

Top-ranked companies of 2022

Australia’s largest gold miner, Newcrest, is the highest-ranked company in IBX 2022, thanks to its “clear, consistent and compelling communications, supported by a narrative of responsible growth and driven by purpose’’. Newcrest’s near- perfect communications score helped mitigate an ESG score below others in the sector.

Two real estate firms, Lendlease and the previous year’s winner Dexus, were ranked second and third respectively, with the top five positions rounded out by ANZ Bank in fourth and Coles Group in fifth.

New Zealand renewable energy generation and electricity retailing company Mercury was notable for debuting straight into the top 10.

7 Key Insights

Every company in the ASX 200 faces its own communications challenges, which are often the result of specific conditions within their sector, meaningful shifts in their strategy or heightened expectations, largely on ESG issues. The IBX data provides insights into how some of Australia’s leading companies are addressing them.

Successful listed companies create long-term sustainable value for all key stakeholders, not just investors. This approach creates more sustainable businesses, attracts the best talent, and builds trust.

As scrutiny grows for listed companies, so must their efforts to use stakeholder communications in an effective manner with this broader audience, and ensure the topics they consider relevant – from emissions to representation – are well covered.

It is in this context that integrated reporting continues to gain momentum within the ASX 200. While it’s not an easy transition to undertake, companies from every sector are prioritising integrated thinking and reporting to better incorporate non-financial value into their corporate communications.

A clear purpose not only drives compelling communications, it shapes every level of corporate strategy and inspires the values that the organisation operates under.

The IBX data shows that most ASX-listed companies now have a clearly stated purpose or mission, however it is not always clear how this core idea informs strategy, growth priorities or ESG priorities.

The 2022 IBX rewards companies that not only communicate a strategic overview, but also provide data on the progress that was made in the last financial year. There is clearly progress still to be made in terms of transparency and relevant data.

Companies compete for attention in a crowded communications space that requires the reinforcing of key messages about the business’ activity, organisational structure and investor value proposition.

However a surprising number of companies in the ASX 200 fail to cover these basics, instead assuming that their audience knows what sets the business apart and that they remember.

A clear and prominent investor value proposition is the perfect way to make their case: why should anyone invest in, work for or partner with them?

As ESG expectations continue to rise, companies must clearly communicate their ESG integrated reporting, as well as the framework(s) they rely on to organise their disclosures.

Leading organisations signal true ESG commitment by embedding it within their corporate strategy, and featuring a bold statement of intent that is intrinsically tied to the organisation’s purpose.

This year’s IBX shows there is still a lot of work to do in the ASX 200 in terms of ESG communications.

The markets are filled with examples of greenwashing, but curious investors, analysts, employees and clients are beginning to see through it.

Targets and performance separate well-meaning statements from effective sustainability strategies. They forge industry leaders. The best sustainability reports assessed this year have several things in common: specific goals and targets, and tactical initiatives to achieve them in a defined period of time.

Making sustainability a priority also requires capable people at the helm. Board composition is one of the most visible signals to the market of an organisation’s true commitment to their ESG strategy.

Organisations can enhance their brand equity and build a differentiated value proposition by investing in design.

A recognisable visual identity that supports a cohesive corporate narrative is an effective way to drive awareness. It can also help to underpin certain elements of the value proposition: experience, value, innovation, etc.

The IBX data shows that too many companies in the ASX 200 are leaving opportunities on the table by relying upon a visual identity and brand executions that feature few (if any) ownable elements such as colours, photography, tone of voice or infographics.

In a crowded communication landscape, audience attention is a prized commodity. Frequency and relevance certainly matter, but consistency is critical in the long run.

There are certain elements of an organisation’s corporate narrative that should almost always be there: a unique value proposition, a strong purpose and a clear strategy. IBX data shows that across key investor-centric channels, consistency is all but consistent.

By reminding stakeholders of these core elements of corporate narrative, listed companies can better frame other (more exciting) messages, helping audiences understand their relevance and gain widespread support.

To learn more and read the full IBX 2022 Report, visit https://ibx.designate.com.au/