Collaborative engagements make for good headlines (if we do say so ourselves). Big names, big numbers from pooled assets under management (AUM) and big calls for action from companies are an increasingly common sight on ESG Clarity.
But how effective are they after the statements have been signed and the communication with companies begins?
Engagement is an increasingly important part of a sustainable fund’s toolkit, particularly in light of upcoming sustainable disclosure regulation in the UK, where engagement may be relied on more heavily to justify a particular sustainable fund label.
Teaming up with larger shareholders or bondholders, or ones better positioned in a particular jurisdiction, can make it easier to gain access to a company’s management or board, or help to exert greater influence, according to Carlotta Garcia-Manas, head of climate transition and ESG engagement at Royal London Asset Management.
But it can also be more difficult to drive change than individual engagements, she says.
“Building consensus on investor expectations and having fluid conversations with a large group of investors [is difficult].”