January 23, 2019 / Interview

Engagement at the heart of serious impact investing

By Jassmyn Goh, Expert Investor

A clear engagement process is vital for fund managers committed to ESG, according to Bank für Kirche und Caritas

Engagement at the heart of serious impact investing

If fund selectors are serious about choosing impact funds they need to find managers that have a clear engagement process, according to Bank für Kirche und Caritas.

The bank’s head of sustainable investment research Tommy Piemonte has said that fund managers that were genuinely committed to environmental, social and governance (ESG) factors engaged with shareholder activism and criticism.

On shareholder activism, Piemonte said managers needed to “give companies the impression that if they did not improve their ESG processes that they would public shame them, divest from them, or would hold shareholder resolutions”.

“You have to give them a clear timeframe in which they have to fulfil some aims,” he said in an interview

“The second engagement process is shareholder criticism where we would love to see asset managers doing engagement with companies they are not invested in at the moment.

“Shareholder criticism is when you raise with companies ESG themes that do not necessarily have a material financial aspect but more value-based ethical aspects.”

Piemonte noted that engagement was an avenue in which selectors could be serious impact investors if they only invested in traditional equity funds.

Click here to watch the full video interview with Piemonte on ESG Clarity’s sister title, Expert Investor.