Responsible investing: What does good engagement look like?

We consider what good investor engagement looks like.
September 2020

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.

This year we are celebrating 20 years of running our investor engagement programme, having engaged with 5,588 companies on important environmental, social and governance (ESG) issues.

The way investors conduct engagement has transformed over the past couple of decades. From a niche approach largely confined to faith-based investors, engagement has developed significantly to become a mainstream investor activity. In fact, it’s largely part of what it means to be an investor in the 21st century.

We view engagement not only as a tool for identifying and managing risks, but also as a route to creating positive impact for the environment and society. In the coming decade, we expect a focus on the real-world outcomes of engagement, as we move towards the 2030 target date for the achievement of the Sustainable Development Goals (SDGs).

 

So what do we believe good engagement looks like? Find out below.

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.


Strategic

Integrating ESG issues into business strategy

47%

BMO GAM engagements at Board or senior executive level*


 

Comprehensive

Engaging companies across asset classes and geographies

87

countries covered by BMO GAM engagement **

comprehensive engagement icon


Impactful

Delivering positive outcomes

3,763

instances of positive change in ESG practices recorded since BMO GAM engagement began

 


 

4.4%

outperformance from successful engagement1

 


 

72%

Current BMO GAM engagement linked to the Sustainable Development Goals***


Bold

Backing up engagement with clear escalation strategies and a willingness to use voting power

25%

BMO GAM votes cast against management in 2019


 

Collaborative

Working with other investors and wider stakeholders

US$40

trillion****

assets represented by the Climate Action 100+ initiative

* 2006-2019

** 2006-2019

*** 2019

****2020

1 Does not indicate BMO Performance. This statistic is based on an academic paper on engagement and financial performance. Source: Active Ownership: Dimson, Karakas & Li (2012)

Discover more about the history of investor engagement and, importantly, what we believe it will look like in this critical decade for achieving the United Nations Sustainable Development Goals.

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