switzerlanden
Sustainable Investing Glossary

Active ownership

Actively exercising your rights as a shareholder. The two main ways to do this are voting at shareholder meetings and engaging – having an active dialogue – with investee companies.

Active shareholders discuss environmental, social or corporate governance concerns with the company in which they invest, in order to preserve long-term shareholder value and enhance long-term returns. They can be very effective in influencing companies’ behavior, especially when they cooperate with other shareholders.

Voting and engagement are two tools that, when combined, can strengthen each other. A long-standing relationship resulting from a multi-year engagement process inspires trust. Voting then becomes much more than simply casting a vote, and evolves into an important element in an ongoing mutual exchange of views. 

There is not as much academic literature on active ownership as there is on other sustainable investment topics because there isn’t much historical voting information yet, and data on engagement is often confidential. However, there are studies that have investigated the relationship between active ownership and financial performance. 

In ‘Active Ownership’ (2013), Dimson, Karakaş and Li analyze engagements with US public companies in the period 1999-2009. During the year after an initial engagement, they observe an abnormal return on the company’s stocks of +1.8% on average. For successful engagements, the abnormal return is +4.4%, while there is no market reaction to unsuccessful ones. After successful engagements, companies experience improvements in operating performance, profitability, efficiency and governance.

Creating returns that benefit the world we live in
Creating returns that benefit the world we live in
Sustainable investing
Robeco and RobecoSAM again receive top PRI scores
Robeco and RobecoSAM again receive top PRI scores
Robeco and RobecoSAM have again been awarded the highest possible sustainability scores by the Principles for Responsible Investment.
04-08-2020 | Insight
Pioneering climate engagement leads Q2 Active Ownership report
Pioneering climate engagement leads Q2 Active Ownership report
It was full steam ahead for Robeco’s Active Ownership team in the second quarter, despite the restrictions brought by Covid-19.
31-07-2020 | Active Ownership Report
Sugar’s role in coronavirus fatalities
Sugar’s role in coronavirus fatalities
The sugar content of food and drinks played an unseen role in the Covid-19 death toll, says engagement specialist Peter van der Werf.
29-07-2020 | Insight