2000-2010
Discover how momentum around investor engagement built throughout the early 2000s.
Building momentum around investor engagement
The launch of the United Nations Principles for Responsible Investment (PRI) in 2006 was a pivotal moment for building momentum around investor engagement. F&C Investments, now a part of BMO GAM, was one of the founding signatories. Although the Principles provided a helpful investment stewardship framework, investors needed to improve their understanding of environmental, social and governance (ESG) issues and their impact on companies’ performance to be able to fulfil their signatory commitments. We led and participated in various collaborations aimed at helping investors understand ESG issues whilst setting best practice standards.
Let’s talk about risk
All of our investment plans involve a level of risk and the value of your investments can go down as well as up. The level of risk will depend upon the underlying investments that you choose to hold in the plans. You need to be comfortable that you may not get back the original amount invested.
Investor engagement: the early years
Alice Evans, Director and Co-Head of the Responsible Investment Team, discusses the early years of fund management and the evolution to focus on investing responsibly.
Our early ESG collaborations
Climate Change
- We were the only asset manager in the 13-member UK Corporate Leaders Group on Climate Change, convened in 2005 to advocate the development of new and longer-term policies for tackling climate change.
- We were one of two asset managers in the working group ClimateWise, which in 2007 set up the climate change principles for the insurance sector.
- We became the sole investor member of the Climate Principles Group in 2010, a group of six financial institutions committed to managing climate risks and opportunities across their full range of financial products and services.
Business conduct
- We had a leading role in shaping the governance of, and getting wide investor support for, the Extractives Industries Transparency Initiative, a global standard for the good governance of oil, gas and mineral resources.
- We led the development of the International Corporate Governance Network’s 2009 Guidelines on Anti-Corruption Practices, and were members of Transparency International’s Steering Group on Business Principles for Combating Bribery.
Environmental stewardship
- We were one of six investors that in 2008 participated in the development of the Ecosystems Services Benchmark (toolkit to enable investors to evaluate biodiversity impacts and ecosystem services dependency within the food & beverages and tobacco sectors), as part of the Natural Value Initiative (NVI).
Human rights
- We were one of two investors in the multi-stakeholder group convened to set up the Global Network Initiative to protect and advance freedom of expression and privacy in the Information and Communications Technology sector.
“These Principles grew out of the understanding that while finance fuels the global economy, investment decision-making does not sufficiently reflect environmental, social and corporate governance considerations – or put another way, the tenets of sustainable development.”
Kofi Annan, UN Secretary-General, Press PRI press release, 2006
2007-8 Global Financial Crisis
In the aftermath of the 2007-8 Global Financial Crisis, fingers were pointed at banks and regulators, but also at shareholders – why did investors not do more to challenge weak governance structures and excessive risk-taking? The crisis promoted many investors revisit their approach to stewardship, which helped further build momentum around investor engagement. Emboldened, they sought to play a key role afterwards by holding financial institutions to account and pressing for long-lasting improvements in governance and culture.
During 2007-8, we conducted in-depth engagement with over 20 global financial institutions to promote changes in culture and management behaviour. This included RBS, Barclays and HSBC. Meanwhile, the 2008 proxy season saw us actively exercise our voting rights on all bank holdings. We engaged with many of the UK, European and US banks most deeply involved in the crisis before the vote to explain our expectations and opposed poor governance practices where appropriate. We also supported all resolutions calling for a “say on pay” at the large US banks.
Engaging in the aftermath of a crisis
Kalina Lazarova, Analyst in our Responsible Investment Team, focuses on the 2007-2009 financial crisis and the impact it had on ESG in the financial services sector.
Discover the history of investor engagement
Our engagement insights
The ESG implications of COVID-19: Focus on food production
COVID-19 and climate change
