2010-2020

Learn about the factors that influenced a significant growth in the adoption of responsible investment approaches and allowed investor engagement to reach maturity.

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.

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“Over the two decades we have run an ESG engagement programme, we have seen more and more companies come to the realisation that if they work together with investors, both sides can reap the benefits in terms of long-term performance.”

Juan Salazar, Director, Responsible Investment

Engaging in emerging markets

Juan Salazar, Director in the Responsible Investment Team, discusses our engagement in the emerging market space with specific reference to the dairy industry.

 

Engagement gets teeth

The 2010s also saw greater attention being paid to the question: what happens if one-on-one engagement fails? Selling the holding was not always an attractive option, as it could mean losing influence and the opportunity for future dialogue. Investor engagement therefore matured to utilise escalation strategies to trigger corporate reaction – explore these below.
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Collaboration

Expressing concerns collectively with other investors can help get companies’ attention.

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Using our voice at the ballot box

Voting against management on key resolutions sends a clear signal to companies and might help with further engagement efforts.

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Attending Annual General Meetings (AGMs)

AGMs offer the opportunity for direct, public dialogue with boards and top executives. Interventions at AGMs can also trigger further dialogue with a company, paving the way to more in-depth engagement on an issue.

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Filing shareholder resolutions

These can be a key rallying point of an engagement campaign to change companies’ behaviour. We will typically support requests to improve board accountability, executive pay practices, ESG-related disclosure and climate change action where we agree with both the issue highlighted as well as the implementation proposed.

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Divestment

Selling a holding can be a powerful signal of dissatisfaction, though it removes some options for future interaction such as the use of the vote. It is often a measure of last resort.

Our engagement with Amazon.com

David Sneyd, Vice President in our Responsible Investment Team, discusses our engagement efforts with Amazon and how we continue to advise them on focusing on ESG factors.
 

20 years in focus

Our in-house data system records every instance of engagement with companies, with records going back to 2006.

Engagement by ESG theme pie chart
Milestones by ESG theme pie chart
ESG theme
Engagement
Milestones
No.
%
No.
%
Corporate Governance
14,584
37%
2,039
54%
Climate Change
6,395
16%
673
18%
Enviromental Standards
5,142
13%
379
10%
Business Conduct
4,747
12%
226
6%
Labour Standards
3,868
10%
205
5%
Human Rights
2,834
7%
171
5%
Public Health
1,447
4%
52
1%
Total
39,017
3,745
Engagement by region pie chart
Engagement by level pie chart
Region
Engagement
No.
%
Europe
10,185
41%
North America
6,810
27%
Asia (ex Japan)
4,085
16%
Japan
2,092
8%
Other
1,912
8%
Total
25,084
Level
Engagement
No.
%
Investor Relations
3,635
34%
Board director(s), non-executives(s)
3,205
30%
Senior Executives
1,846
17%
Operational Specialist
1,490
14%
Other
619
6%
Total
10,795

All data as at 31-Dec-19. Figures are subject to rounding and therefore may not equate to 100%. Milestones achieved are not guarantees of future engaged company, firm, or product performance.

Finding strength in collaboration

Collaborative engagement action came of age in the 2010s as investors recognised and experienced its benefits. A unified voice helps investors communicate their concerns whilst gaining power and legitimacy from the perspective of corporate management.

Crossing boundaries

Whilst equities remain the most common asset class to apply an engagement approach to, the past decade saw rapid development of engagement elsewhere, including fixed income, private equity and real estate. Investor engagement also began to spread beyond developed markets as major investors increasingly recognised that these countries are highly exposed to ESG-related issues, such as climate change and corruption.

Discover the history of investor engagement

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2000-2010:

Learn how investor engagement began to enter the mainstream

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2020-2030:
Uncover the future of investor engagement

Our engagement insights

Responsible Investment
Woman shouting through megaphone
5 min read
August 2020

ESG Viewpoint – Racial justice: the imperative for investor action

How should our industry address racial justice?
Responsible Investment
Busy street in the city
6 min read
June 2020

The ESG implications of COVID-19: Focus on ocean health

The ESG implications of COVID-19 for our oceans