ESG - Active Ownership
Exercising the rights of ownership to influence company decision making is one of the means with which investors can directly affect a company's adherence to ESG principles. This is an important part of investing responsibly.
It is now widely recognised that active ownership is crucial for ensuring that companies are held to task for failings in their governance or their approach to various other ESG challenges, such as climate change, gender equality or policies on resources and waste. This can be achieved by entering into constructive dialogue with company directors or by exercising shareholder proxy voting rights to enforce good behaviours and eliminate poor, unethical or short-sighted behaviours. This type of action can directly improve the long term value of a company whilst also providing positive outcomes for society.
Active ownership is considered amongst the strongest mechanisms to maximise returns, reduce risk and have positive impacts and has been adopted by many asset managers as part of their ESG strategies.