This is my war

Funds people ignacio perea

In the June issue of its monthly magazine, Funds People publishes an interesting article by Director of Investments Ignacio Perea on how environmental criteria are entering the corporate agenda.

You can view it at this link

 

This is my war

Contrary to what Rambo yelled in the film First Blood, more and more shareholders are seeking to become actively involved in companies’ strategies.

A growing part of the investment community is realising that excluding companies from investment processes rarely affects business conduct and also reduces diversification.

Therefore, the answer is active involvement, which aims to ensure that shareholders, through their votes, can influence or prompt a change of strategy or policy within a company.

One example is the Climate Action 100+ initiative, which brings together 52 billion euros in assets of 540 managers and urges around 170 companies to take immediate environmental measures. However, this lobby doesn’t adopt a formal position and instead points to resolutions it deems worthy of being taken into account.

To do so, the asset managers should have, on the one hand, an engagement policy whereby the priorities are determined in terms of markets, sectors and business practices, as well as the way of promoting said priorities, by means of either direct dialogue or voting.

On the other hand, they should have a voting policy determining the general principles and potential voting universe and establishing their ex ante and ex post communication to customers.

Environmental and social challenges are increasing in importance on the corporate agenda, as investors understand that effective management of the risks stemming from sustainability is essential for long-term value creation.

And, be warned, poor behaviour in terms of sustainable issues can put any board of directors on the ropes. Cooperation between shareholders, for whom this IS their war, is now a decisive factor for the success of the sustainable agenda.

 

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