Shareholder Engagement – What’s That?

Thursday, July 7, 2022

Nov-03-2021

Over the last few months, I have shared my thoughts with you about the three basic pillars of ESG. It’s easy to see how reviewing and monitoring environmental, social and governance issues can help you make investment choices you are comfortable with. And you know that companies that act responsibly are the ones who have a better chance of succeeding and growing in the long run.

But when you look at responsible investing that way you limit your expectations. It is a passive way of using your investment capital to make a better world.

Engage to make change

Avoiding stocks that don’t meet your investment doesn’t bring about change. It may make you feel more comfortable about the way your money is being used, but other investors will just buy the stocks you have sold or decided no to buy at all.

That is a criticism often levelled at the responsible investment strategy. You aren’t making a difference unless you have skin in the game.

This is where shareholder engagement comes into play. When socially responsible investors pool their resources, they can push for change. IA Clarington Investments regularly publishes the Dialogue to Action: Shareholder engagement report. This report lists the actions IA Clarington has taken as an active stakeholder.

Please note: If you want a copy of the latest copy of Dialogue to Action: Shareholder engagement report, I can send you a copy. Email me at [email protected] and I’ll sent it out right away.

You may already be involved

Through their investment in these companies IA Clarington has a place at the table. They can actively work to make a difference. Many of the fund companies involved in responsible investing do this. And when they work together, they’re even more powerful.

If you are one of my clients, you are probably already part of the IA Clarington team.

Dialogue to Action lists how, in 2020 and the first quarter of 2021, IA Clarington engaged in shareholder engagement. They:

Engaged with 42 companies
Filed 9 shareholder resolutions
Advanced 10 UN Sustainable Investment Goals (SDGs)
Participated in 13 investor statements of support, alliance, or initiative

Together we CAN make a difference

As responsible investors we believe that companies will enjoy a healthier bottom line when they act responsibly and respect global environmental, social and governance standards. By participating in shareholder engagement, we actively push for positive change instead of sitting on the sidelines.

Shareholder engagement is a powerful social and economic tool. Together we can promote positive change with our investment dollars.

You may think you can only make change with your charitable contributions, your volunteer efforts, even what and where you buy food or household goods. All those things can help to make a better world. But your investment dollars can help too.

Let’s work together to use our investment capital to make a better world. And if you have friends and family who feel the same way you do, they tell them about the work we’re doing. Let them know they can make a positive difference too. Tell them to find a investment fund advisor involved in responsible investing (maybe a member of the Responsible Investment Association). Or get them to call or email me at 1-888-868-6689 or [email protected].

As Tommy Douglas, crowned Greatest Canadian back in 2004, was fond of saying “Courage, my friends; ‘tis not too late to build a better world.”