Becoming better stewards
Engaging for long-term impact
Michael Baldinger
Head of Sustainable and Impact Investing
It seems like common sense that companies that manage their environmental, social and governance (ESG) issues well, are in a good position to outperform competitors that don't. Investors are seeing the benefit of taking ESG into account. Now, many are looking for ways to become better stewards of their investments by helping companies improve their sustainability. Robust portfolio risk management and due diligence may involve investors engaging with companies in order to gain information and influence behavior.
This engagement can give investors a real understanding of the state of a company and its commitment to a certain strategy.
We find that large investors are eager to engage if they believe it can help improve performance. A large-scale study of asset owners conducted this year by Responsible Investor found that asset owners rank fiduciary duty and the risk of not taking ESG into account as two of the top three reasons for incorporating ESG into their investment management. Engagement can be a vital tool for meeting these goals.
More from Panorama: Mid-Year 2019
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