For Susheela Peres da Costa, head of environmental, social and governance (ESG) services at governance and research consultancy Regnan, this is a double-edged sword, with a greater access to information often meaning greater access to a message that has been carefully managed.

“One of the things that worries me, recently, about the proliferation of different engagement messages that corporations are getting is that some, just at the margins and typically in the investor-relations function, are starting to become savvy about developing a kind of communication program for engagers,” she told delegates at the International Responsible Investment Conference in Melbourne. “I think it’s really important that all of those doing the engagement in the market be tenacious about who they want to talk to and ensure that the agenda that gets covered in the engagement is their agenda and not the company’s marketing or PR agenda.”

This viewpoint, supported by most delegates, feeds into an overall observation that while there is more engagement from companies, the quality has not necessarily improved.

 

The thing to do

This fragmentation has lead engagers to begin questioning how they justify ongoing engagement, in terms of both resources and expense.

Michael Walsh, head of ESG and strategy at ethical investment manager Hunter Hall International, said it was often a case of simply getting companies to put information “on the record”.

“I chose 10 companies per year to engage with and that is a manageable number,” he said. “We’re after outcomes, but the point is not to claim it for yourself. Companies make their own decisions in their own time and according to their own agendas. Often you’re an assistant to the process.”

Tim Macready, chief investment officer of Christian Super, said the engagement process was ongoing and acknowledged that it had also become a lot more sophisticated.

“I think if we’re being brutally honest with ourselves, we started it because it was the thing to do,” he said.
“We’d done negative screening, we’d got ESG integration working reasonably well and engagement seemed to be the next step. I think it’s only over the last two or three years that we’ve realised the value of engagement to us as an oganisation.”

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