Investor engagement: routes to escalation

Discover investor engagement escalation strategies.
September 2020


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Engaging with companies on environmental, social and governance (ESG) issues is now a widespread practice among investors. During the 2010s, 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 in general, 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.

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.


Expressing concerns collectively with other investors can help get companies’ attention. After our requests for engagement on environmental and social issues remained unresponsive, we decided to bring together international investors with a total of $2.3 trillion in assets under management to engage with This proved successful in opening the doors to a still-ongoing constructive dialogue with the company on issues like labour standards, human rights and emissions management.

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. For example, we voted against four of Mylan’s directors after failure to recognise their role in/drive change after the Epipen pricing scandal; against Hon Hai’s 2011 annual report and accounts due to lack of progress in improving labour standards; and against Glencore’s interim chairman in 2013 when the company failed to disclose he was in the list of candidates to become chairman.

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. Since 2017, we have attended the AGMs of Royal Dutch ShellTotalFiat ChryslerAnglo American and BP to raise questions – either directly or as part of an investor group, about their climate change management strategies.

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. In 2019, we supported almost 67% of all shareholder resolutions in the US and over 70% of shareholder resolutions relating to environmental and social issues across all regions, generally contrary to management recommendation.


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.

Risk Disclaimer

The value of investments and any income derived from them can go down as well as up and investors may not get back the original amount invested.

Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

Use our handy glossary to look up any technical jargon you are unfamiliar with.
Use our handy glossary to look up any technical jargon you are unfamiliar with.
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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

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