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Sustainable Investing Glossary

Engagement

A long-term active dialogue between investors and companies on environmental, social and governance factors.

An active dialogue offers investors the opportunity to discuss sustainability risks and opportunities with companies and provides them with insights into investors’ expectations of corporate behavior. This way, investors encourage companies to adopt more sustainable practices. Companies with sustainable business practices can create a competitive advantage and are more likely to be successful over the long run, ultimately improving the risk/return profile of their securities. Effective engagement can therefore benefit companies, investors and society at large. 

Engagement typically runs over a three-year period, during which the engagement specialists have regular contact with company representatives and track progress against engagement objectives. Often they combine their efforts in collaborative engagement initiatives with other institutional investors. The outcome of the engagement efforts is communicated to analysts, portfolio managers and clients, enabling them to incorporate this information into their investment decisions.

Making better-informed investment decisions
Making better-informed investment decisions
Sustainable investing
‘You need a command economy, and this goes against conventional wisdom’
‘You need a command economy, and this goes against conventional wisdom’
Chandran Nair is not one to pull his punches when it comes to dealing with the world’s problems.
11-11-2019 | Interview
Lower credit risk observed in sectors that are positively aligned with the SDGs
Lower credit risk observed in sectors that are positively aligned with the SDGs
Our analysis of historical performance data confirms what we see in practice.
07-11-2019 | Insight
Living wage platform expands focus
Living wage platform expands focus
An investor group set up to promote living wages is broadening its scope outside garments after marking its first anniversary.
04-11-2019 | Insight
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