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    INVESTMENT BANKING  |  3 POINT PERSPECTIVE

    Planning for an IPO? Time for a sustainability strategy

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    Contributor: Marie Freier

    01 Nov 2023

    authorImage

    Contributor: Marie Freier

    01 Nov 2023

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    Given the growth in sustainable investing, ESG disclosures are now relevant to all companies planning to IPO. Marie Freier, Global Co-Head of Sustainable & Impact Banking, offers an insight into the Environmental, Social and Governance factors CEOs and boards need to prepare to attract IPO investors. 

    1. Demand is rising for ESG information in IPOs

    As we’ve seen in recent years, the interest in sustainable investing has grown and with it the relevance in the IPO context. Investors need depth, detail, and commitment in order to be able to participate. The more a company can disclose as part of the IPO process, the more chance it has to maximise market demand and valuation.

    Having an explicit sustainability strategy will allow it to really address the growing number of funds in the space means potential interest from a growing number of sustainable funds.

    In fact, some investors may choose not to participate in an IPO, or aren’t able to, if insufficient environmental, social or governance information is being provided. It’s really becoming an integral part of the IPO process.

    2. Transparency applies to all company types

    We’ve found that there is a misconception that only companies whose products or services are explicitly addressing sustainability needs should be prioritising these disclosures.

    In reality, many investors now seek the relevant disclosures from all types of companies and really want to know that these risks and opportunities are embedded in both the management and strategy of the company.

    In terms of when to start preparing, there’s really no such thing as too early. The most advanced companies can demonstrate that they’ve identified, embedded and are addressing the material issues for their business, really thinking about things.

    This might include establishing the right governance structure, setting targets, and disclosures they can make today and in the future.

    3. The right ESG strategy & priorities matter

    On your company’s path toward IPO, we highlight five key areas of ESG preparation to help us guide and inform the process:

    1. Firstly, and most importantly a materiality assessment to demonstrate that you understand which sustainability issues are most relevant to your business.
    2. Second, prioritise what do you want to achieve pre-IPO, and also what progress can you substantiate through and beyond the process?
    3. Third, set up a robust ESG governance structure that includes senior stakeholders.
    4. Fourth, think about what disclosures you can make today and in future against both voluntary and regulatory frameworks.
    5. And finally, make sure that the information is readily available to investors.

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    About the expert

    Marie Freier

    Global Co-Head of Barclays Sustainable & Impact Banking

    Marie Freier is Barclays Global Co-Head of Sustainable & Impact Investment Banking. Marie and her team advise and raise capital for emerging growth companies that are addressing a wide range of sustainability issues, as well as for existing clients navigating their own transition. She is deeply engaged in market-wide ESG discussions, serving on the Barclays Sustainable Finance and Climate Council as well external groups, such as the European Risk Management Council’s Sustainability Think Tank. Marie was previously Global Head of Cross-Asset ESG Research at Barclays, leading the integration of ESG considerations into Barclays research product. In this role she built a global team of ESG subject matter experts to support credit and equity analysts in assessing how ESG Attributes affect financial risks and valuations across sectors and companies, ultimately driving security pricing, as well as being in close dialogue with institutional investors globally. Marie joined Barclays from Sanford C. Bernstein, where she served as Head of European Product Management and, most recently, as both co-Head of European Sales and Global Head of ESG, spending more than 13 years at the firm. She previously worked in the reinsurance industry for Aon and Willis Re, now part of Willis Tower Watson. Marie holds an M.A. in Mental Philosophy from the University of Edinburgh.

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