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Incorporating ESG Considerations into Engagement Practices

By April 6, 2017August 11th, 2022No Comments

Most of the discussion around environmental, social and governance (ESG) investing is about screening out companies that don’t fit specific ESG criteria. But investors who take this approach are missing an opportunity to drive change by engaging directly with companies and pushing for improved sustainability practices. The High Meadows Institute recently published a report that explores the different ways investors can engage with companies and provide evidence that shareholder engagement really works — in terms of both profit and ethics.

For the purpose of this report, we examined both private and public engagement practices. Private engagement is the route used most often by the majority of institutional investors. This can be in the form of emails, letters, phone calls and in person meetings with company managers. In order to shed some light on private engagement practices, we interviewed Jem Hudson, Vice President, Credit Research at Breckinridge Capital Advisors, a member of the Institute’s ESG Path to Value forum.

The report present an interesting case study of public engagement by highlighting contrasting results in the oil and gas sector by comparing similar proposals received by ExxonMobil, Chevron, BP and Shell and the very different management responses and investor voting outcomes.

To download the full report, click here.