united kingdomen
Engagement considered important by four in five investors

Engagement considered important by four in five investors

18-04-2022 | Insight

Some 80% of investors say engagement will be a significant factor in their investment policy in the next two years, the Robeco Global Climate Survey has found.

  • Peter van der Werf
    Peter
    van der Werf
    Engagement Specialist

Speed read

  • Majority of investors think engagement is effective in fostering change
  • Net zero emissions set to become the biggest engagement theme
  • Oil and gas industry targeted amid drive to low-carbon business models

The survey showed that 61% of investors thought engagement was “quite effective” in fostering change and progress on ESG policies at the investee companies and they expect their impact to grow in the future. Some 11% thought it was “very effective” while 25% were neutral.

Three quarters of investors said 74% said net-zero emissions will become the biggest engagement theme over the next two to three years in the drive to achieve carbon neutrality by 2050.

And active ownership is the favored approach to dealing with contentious sectors such as oil and gas, where voting and engaging to secure decarbonization commitments have proved particularly effective. Some 28% say they will be an active owner in oil and gas companies in the next two years.

How investors view engagement.
Source: Robeco, CoreData

Views of 300 investors

The results are contained in the 2022 Robeco Climate Survey, which gathered the views of 300 global investors on their approaches to decarbonization, climate change, biodiversity and engagement. It is the second survey of its kind following the success of the 2021 report.

The research was carried out via an extensive global online survey conducted by CoreData Research during January 2022. Collectively the investors questioned have assets under management of USD 23.7 trillion, ranging from under USD 1 billion for the smallest to over USD 1 trillion for the largest.

Respondents were asked about their attitudes towards active ownership and engagement, which is not practised by all. Robeco has operated an Active Ownership and engagement team since 2005, and sometimes engages or votes on behalf of others.

Some of the other key findings of the survey were:

  • Active ownership and engagement is now a key part of investment policies for almost 73% of investors, while 80% said its importance will increase in the next two years.
  • 73% of European investors and 61% of investors globally say engagement strategies are quite effective as a successful tool to foster change and progress on ESG policies at investee companies.
  • 60% of investors say that they have a very good or reasonable level of knowledge and understanding of engagement with companies in order to drive change on carbon emissions.
  • 66% of investors say they are motivated to use active ownership/ engagement to ensure that governance standards comply with good practices
  • While investors generally want better data on ESG issues, corporate governance data is currently used by only just over half of investors. Lack of data is consistently cited as one of the biggest obstacles to sustainability.

Proven to get results

“It’s not surprising that engagement has such a high priority among investors as it has consistently proven to get results, particularly in the climate change arena,” says Peter van der Werf, Senior Manager for Engagement at Robeco.

“Engaging with the higher-carbon emitters to encourage them to switch to lower-carbon business operations is an effective way of decarbonizing as we pursue net zero emissions. We run engagement programs at Robeco with that objective, often in collaboration with groups such as Climate Action 100+.”

“This has already shown some success in persuading the oil and gas industry to move away from fossil fuels and develop renewable energy sources, and in getting the steel and mining industries to develop stronger operational carbon reduction targets. We note from the survey that 28% of investors say they will be an active owner in oil and gas companies in the next two years, and that can only help pursue this agenda.”

“We also practice ‘engagement with teeth’ where we remind companies that they risk being excluded if they cannot show progress on the topics under engagement, such as decarbonization or the general reduction in emissions. The threat of divestment that many investors are now widely considering does make an impact and bring these companies to the table.”

What are investors doing about the climate?
What are investors doing about the climate?
Download here our 2022 Global Climate Survey
Logo

Disclaimer

Please read this important information before proceeding further. It contains legal and regulatory notices relevant to the information contained on this website.

The information contained in the Website is NOT FOR RETAIL CLIENTS - The information contained in the Website is solely intended for professional investors, defined as investors which (1) qualify as professional clients within the meaning of the Markets in Financial Instruments Directive (MiFID), (2) have requested to be treated as professional clients within the meaning of the MiFID or (3) are authorized to receive such information under any other applicable laws. The value of the investments may fluctuate. Past performance is no guarantee of future results. Investors may not get back the amount originally invested. Neither Robeco Institutional Asset Management B.V. nor any of its affiliates guarantees the performance or the future returns of any investments. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency.

In the UK, Robeco Institutional Asset Management B.V. (“ROBECO”) only markets its funds to institutional clients and professional investors. Private investors seeking information about ROBECO should visit our corporate website www.robeco.com or contact their financial adviser. ROBECO will not be liable for any damages or losses suffered by private investors accessing these areas.

In the UK, ROBECO Funds has marketing approval for the funds listed on this website, all of which are UCITS funds. ROBECO is authorized by the AFM and subject to limited regulation by the Financial Conduct Authority. Details about the extent of our regulation by the Financial Conduct Authority are available from us on request.

Many of the protections provided by the United Kingdom regulatory framework may not apply to investments in ROBECO Funds, including access to the Financial Services Compensation Scheme and the Financial Ombudsman Service. No representation, warranty or undertaking is given as to the accuracy or completeness of the information on this website.

If you are not an institutional client or professional investor you should therefore not proceed. By proceeding please note that we will be treating you as a professional client for regulatory purposes and you agree to be bound by our terms and conditions.

If you do not accept these terms and conditions, as well as the terms of use of the website, please do not continue to use or access any pages on this website.

I Disagree