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Global Sustainable Investement Alliance

Focus: Shareholder Stewardship across the Globe Responsible and sustainable investors are often keenly interested and engaged in the companies and projects in which they are invested. However, historical, cultural and legal differences between regions have resulted in markedly different approaches to shareholder stewardship. In some markets the main form of shareholder stewardship is voting of company shares, whereas in others, the preferred vehicle for instigating change is private or public dialogue with company management or the board of directors. In addition, they can be very active in political and legislative issues. The data produced for this study show that corporate engagement and shareholder action as a sustainable investment strategy is, in relative proportion to the total figures, more common in the US and Canada compared to the other regions. That the US and Canada are the most active markets globally in terms of corporate engagement and shareholder activism partly results from the shareowner structure, which tends to be less concentrated, but also from an activist culture which has carried over into investment management. The use of shareholder-sponsored resolutions at annual meetings, in particular, sets these two markets apart, as this is much less common in other markets. In the US, more than 400 sustainability-related shareholder proposals were on company ballots in 2011, whereas in Canada, which is roughly one-tenth the size of the overall market in the US, there were 72 resolutions brought before companies. In contrast, in many European markets, shareholder resolutions are almost unheard of. However, as noted already, the figures are not entirely comparable, and very different strategies are measured across the regions covered in this study. For example, in the US, the reported figure of US$ 1.54 trillion consists of assets involved in filing or co-filing shareholder resolutions in the years 2010-12. Shareholder engagement activities with companies conducted privately is not added to the US figures, because this is outside their measurable definition. If one adds in the estimated US$ 4.9 trillion worth of assets in the US reported to be used in corporate engagement outside of filing or co-filing a resolution, the US is by far the biggest of the regional markets for shareholder engagement. In other markets, private or public engagement with companies is included in the figures, as this is often the main form of shareholder action besides the active voting of company shares8. In Canada, for example, if a fund manager has a comprehensive sustainable or responsible investing policy and a formal corporate engagement strategy that addresses ESG issues, and if direct dialogue with companies is undertaken on these issues in a systematic manner, the fund’s assets will then be considered under the engagement category. 8 In the US and Canada, voting by asset owners and managers is practically ubiquitous because it is seen as part of fiduciary duty. This is not the case in most other markets. Global Sustainable Investment Review 2012 16


Global Sustainable Investement Alliance
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