 Shareholder EngagementJames Gifford and Robert L. Berridge Chapter 11 in Sustainability:Business and Investment Implications, 2023, pp 287-302 from World Scientific Publishing Co. Pte. Ltd. Abstract: This chapter focuses on shareholder engagement, a subset of sustainable finance dedicated to the unique role that investors can play in influencing a company’s strategy in areas of sustainability. Pension funds, mutual funds, foundations, wealth managers, insurance companies, and other institutional investors control most of the capital invested in listed equities globally. Shareholder engagement by US and European pension funds on environmental and social issues is increasing rapidly. The chapter describes a broadening of the mainstream shareholder engagement agenda, from traditional governance and strategic financial issues, to include environmental and social drivers. This is potentially one of the most profound shifts in institutional investment seen over many years and may significantly increase the role of investors in moving the corporate sector, and ultimately society, toward a more sustainable future. While traditional shareholder activists focus exclusively on the financial performance of individual firms, ESG engagement can also address economywide and systemic sustainability issues. The chapter traces the origins of shareholder engagement and explores its primary strategies and tools. It raises the critical question of whether shareholder engagement works. One convenient mechanism (primarily relevant in the US) that indicates whether shareholder activism has been effective in changing corporate behavior is the number of resolutions withdrawn after successful negotiation in advance of going to a vote. The chapter concludes by emphasizing that although shareholder engagement may not be the highest profile strategy within the sustainable investing space, given recent evidence of its efficacy, its scalability, and its potential for delivering financial returns, its importance should be elevated in the future. Keywords: Sustainability; Sustainability Risks and Opportunities; Sustainability: Business and Investment Implications; Sustainable Finance; Sustainable Investing; Impact Investing; Sustainable Entrepreneurship; ESG; Business Case for Sustainability; Investment Case for Sustainability; Introduction to Sustainability; Introduction Sustainable Finance; Introduction to Sustainable Investing; Introduction to ESG; Introduction to Impact Investing; Sustainability Handbook; Sustainability Textbook; Sustainable Business Textbook; Sustainable Business Handbook; Sustainable Finance Textbook; Sustainable Finance Handbook; Impact Investing Textbook; Risk Management & Sustainability; The Corporate Sustainability Spectrum; Business and Financial Implications of Climate Change; The Financial Case for Embedding Sustainability Core to Business Strategy; Corporate Sustainability & Financial Performance; Shareholder Engagement; The Pressing Needs For A Sustainable World; Scale-up; Impact Entrepreneur; Impact Entrepreneurship; Sustainability Science and Challenges; Internalizing the Externalities; The Role of Government; Fiscal Impact; Macro-economic Performance; Realism; Mission Creep; Single Issue Capture; GreenWashing; Whitewashing; Hidden Agendas; Transparency; and Competitiveness (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:wsi:wschap:9789811240928_0011 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in World Scientific Book Chapters from World Scientific Publishing Co. Pte. Ltd. |
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