Large institutional investors increase integration of ESG factors into engagement, investment decisions and proxy voting
ESG integration continues to rise at large asset managers, with the vast majority saying it played a greater role in engagement, proxy voting and investment decisions during the last year.
Ninety-eight percent of institutional investors say ESG opportunities and risks – excluding the impact of Covid-19 – were given more consideration during shareholder engagement this year compared with last year, according to new research from Morrow Sodali. Ninety-five percent say ESG played a greater role in investment decisions, while 85 percent say they were taking ESG into account more often when voting the proxy.
It can be hard for management to understand why investors choose to sell their company’s stock
The executives of listed companies are often so convinced of the greatness of their management and strategy that they always see value in their company. Given this, it can be difficult for them to understand why an investor doesn’t buy a stock – or chooses to sell it.
The work of investors isn’t to decide whether a company is good or bad, or whether they like the executives. Their work is to discern whether buying that share will generate returns. By understanding the factors that influence investor decision-making, companies can have a better relationship with the market.