In a three-part series covering the engagement process, we provide views on evolving expectations and market practice for more effective investor stewardship.
The first entry focused on Objectives, Strategy, and Prioritization.
The second entry covered the Initiation phase, Monitoring, and Escalation.
In this third entry, we provide a spotlight on what voluntary and statutory initiatives require in terms of active ownership reporting and disclosures, outlining expectations and best practices. See drop-down sections below for more information.
Reporting objectives
In most jurisdictions, investors are expected to report on their engagement and voting activities to their stakeholders. The information should be easy to access and understand, and provided on a regular basis (at least annually, increasingly so bi-annually or quarterly). Best practice would also have investors provide some disclosures on both entity and product-level.
Stewardship reporting address different stakeholder groups and objectives:
Internal stakeholders: It enhances internal accountability and coordination, for example in terms of a feedback-loop to investment decision-making.
Clients, beneficiaries, regulators and others: It facilitates for increased transparency and validation of activities, promotes competition, and support standards development.
Issuers: It provides opportunity to set expectations to engaged entities, and hold them accountable by rewarding positive progress and punishing poor performance.
Information use & intent
Stewardship codes
UN PRI & general best practices
Spotlight: Reporting on escalation activities
Spotlight: Reporting on outcomes
Regional Insights: Europe (SFDR & Taxonomy)
Regional Insights: United States
Conclusion
Want to get in touch? Send us a message.
Endnotes:
1) https://www.icgn.org/icgn-global-stewardship-principles