Author: Denitsa Georgieva, Parterships Executive, Tumelo
I recently attended the Sustainable Investment Summit in London's Waldorf Hotel. The room was packed with asset managers, pension funds, impact investors and more to the point - great conversations surrounding sustainable investing.
Here are my top three takeaways from the event:
Investing and engagement are peas in a pod
During her session, Alice Bordini Staden, stewardship lead at National Trust said:
"The National Trust invests in different companies for financial reasons — they can't only pick companies that will be net zero by 2030."
This comment caused a lot of nodding heads around the room. She elaborated that rather than divesting from specific industries, the National Trust's stewardship strategy was to rotate its portfolio and engage with the companies within it.
After all, as Ms. Staden notes: "If we divest, there are always going to be people who are happy with what the company is doing and we won't be able to make a difference."
Investing in a range of industries helps spread the risk of investments — so it makes sense that when it comes to sustainability commitments, the Trust's investment choices go hand in hand with its engagement strategies.
Transparency and reporting are the latest buzzwords
Speaking to attendees at the summit, I noticed a recurring theme: when it comes to preparing for environmental, social and governance (ESG) commitments, data is crucial. This is why asset owners are getting increasingly focused on ways to obtain data.
This was reinforced by Ewa Jackson, BlackRock's Head of Sustainable Client Solutions, who in her session on tackling the climate transition, said: "Reporting and transparency are becoming extremely important for regulators and asset owners alike."
For asset managers, this means offering fuller disclosure of investment strategies and engagement outcomes. When it comes to proxy voting, clients are not only demanding voting data, but are also increasingly interested in having a say — and even voting themselves.
This is why BlackRock launched its pass-through voting solution, Voting Choice, explained Ms. Jackson. The solution, much like other pass-through voting products, allows BlackRock's clients who are in a pooled fund to vote at investee companies' AGMs, based on the size of their shareholding in the fund.
How can you use stewardship to drive impact?
Above is the question posed by Simon Dawson, Director of Corporate Engagement & Deputy CEO at ShareAction.
In his keynote closing speech on Stewardship for responsible investment, Mr. Dawson surfaced opportunities for the industry to be more proactive on stewardship. This is especially true regarding shareholder resolutions which have been rising in number each year — a clear sign of their importance to effective stewardship.
Citing a report by ShareAction, he highlighted that no asset manager received a triple AAA (the highest) rating for their approach to responsible investment in 2023. Mr. Dawson said joining pacts such as Climate Action 100 and The Net-Zero AM Initiative are not enough for managers touting responsible-investment credentials, emphasising that:
"Transparency [over investment practices] is extremely important to mitigate greenwashing."
I was particularly interested by his caution that regulation always appears when the market moves, taking it as a sign that the industry as a whole should tighten its responsible-stewardship efforts.