He says Rathbones tends to partner with other shareholder organisations as this increases the voting and engagement influence they can have.
Crowl says technological advances are helping the process of engagement, as customised voting tools now exist. She says she also tends to work with industry bodies on these issues, and says another advantage of working with such organisations is they often provide fresh insights into areas that should be of concern to us as sustainable investors and we work on those.
Narina Mnatsakanian, executive director – sustainability centre at Van Lanschot Kempen, says engagement is becoming easier both as a result of technological changes, but also because more data is available, which provides ammunition for investors to use.
She says: “Engagement is becoming ever more critical in the rapidly changing world. As asset managers move to set climate and nature-related targets, engagement with the largest emitters or companies that have the biggest impacts and dependencies on biodiversity is essential to make sure that portfolios remain on the pathway to Paris alignment or reduce negative impact on nature, for example."
Mnatsakanian adds: "There are increasingly more platforms and tools available that can be used during engagements, such as Climate Action 100+, Net Zero Company Benchmark, or the Platform Living Wage Financial benchmarks.
"Collaboration is key to achieving our sustainability goals, it is not something financial sector participants compete on. What makes Van Lanschot Kempen unique is the ‘how’ – our approach to integration and stewardship, which is fully embedded throughout the business.”
From a fixed income perspective, Bryn Jones, head of fixed income at Rathbones, says when companies issued bonds for a specifically ESG purpose, initially there may have been a 'greenium' – that is, the bond issuers have been able to get away with paying lower interest rates on green bonds than on regular bonds.
He says some issuers may have taken advantage of this, despite not particularly caring about sustainability issues.
Jones says there is now a greater supply of green bonds coming to market, which, apart from meaning the yields offered are now more attractive, means buyers of green bonds can be more selective, and ensure the capital provided by the bond holders really is being used for the intended purpose.
Crowl says the other aspect of engagement is reporting back to the investors in her funds to demonstrate how they are engaging with investee companies. She says she does this by preparing a quarterly report, including case studies, for her clients to see.
