2010-2020

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.

Investor engagement reaches maturity

Mounting evidence of the link between ESG factors and financial performance, as well as the increasing threat from environmental and social challenges to global prosperity, drove rapid growth in responsible investment approaches, and investor engagement matured considerably. Adding to the pressure, regulators took notice and leading asset owners became more demanding of their managers. Major industry players responded by expanding the range, scope and depth of their engagement activities.

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.

“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.

Responsible Investment 20 Years of engagement Juan Salazar

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.

Collaboration

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

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.

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.

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.

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.

Responsible Investment 20 Years of engagement David Sneyd

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
Milestones
by ESG theme
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
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
Engagement
by Level
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

2000-2010:

Learn how investor engagement began to enter the mainstream

2020-2030:

Uncover the future of investor engagement

Our engagement insights

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