What makes DFDS attractive to the financial community?
Investors and banks take an increasing interest in Environmental, Social and Corporate Governance (ESG) reporting when they assess a company’s valuation, loan terms, and investment attractiveness.
“Sustainability work in a company like ours means integrating social and environmental concerns into our business operations. One aspect of achieving this is through concrete action - upgrading our fleet, developing new fuel types and taking care of our people. The other aspect is reporting what we do. By documenting environmental and social data we can help set industry standards and raise the bar for what we can expect from ourselves and what others can expect from us,” says CSR Director Sofie Hebeltoft.
We started our Environmental, Social and Corporate Governance (ESG) reporting in 2019, based on data from the business. We define performance indicators within each area that together give an idea of how we’re taking responsibility for our environmental footprint and employees’ well-being – areas that are not traditionally liked to financial performance.
“Legally, we’re obliged to report on our carbon emissions, but the other parameters in our ESG reporting are something we set ourselves, based on best practice and what we as a company want to take responsibility for and achieve,” Sofie says.
ESG reporting affects financial valuation
Investors and banks are increasingly interested in sustainability reporting when they assess a company’s valuation, loan terms and investment attractiveness:
“ESG is an increasingly hot topic. When analysts track our results for investors, they still primarily look at the financial numbers. But how we’re improving and becoming more sustainable is gaining traction as a parameter for being an attractive investment,” says DFDS’ Head of Investor Relations, Søren Brøndholt Nielsen.
Banks are showing an interest, too. “Credit valuation has traditionally been a hardcore financial exercise,” says Group Treasurer Allan Kristoffersen: “Now they supplement it with a separate ESG assessment. It’s not yet been assigned a particular weight in the overall score, and the regulation is not in place, but ESG clearly contributes to a company’s risk evaluation when banks consider lending out money and on what terms.
“In the bigger picture, banks also have to document how they’re going about their sustainability reporting. Having companies with sound sustainability efforts and results in their loan portfolio improves the bank’s own ESG profile and strengthens their reputation,” Allan says: “I foresee that we’ll soon be seeing that the more we improve our social and environmental reporting, the better the loan terms.”
“In time, we’d like to increase the number and types of parameters on which we report – like the gender pay gap, waste recycling and share of renewable energy used. But this requires that we have data that covers all of DFDS, and we’re not quite there yet,” Sofie says: “We’ll also see ESG reporting merging more and more with the traditional financial reporting and be integrated with our daily operations and activities – that we include ESG aspects to a greater degree when we do financial investments and acquisitions.”
Find 2019 ESG numbers (page 33)
DFDS’ 2020 CSR Report comes out 23 February