How Have Fund Managers Been Pushing for Change?

Engaging with companies is how fund managers push for change, and this tactic was more important than ever in a pandemic year

Holly Black 12 May, 2021 | 9:22AM
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Voting in a ballot box

Investors don’t just rely on fund managers to grow their money, but to hold the companies in which they invest to account and to encourage change for the better. This is known as engaging with companies and, with the growing popularity of sustainable investing, is a key facet of ESG. Engaging can mean voting against executive pay, helping to steer a firm through a controversy, or pushing for change in diversity or workers rights.

Many fund managers prefer this tactic of working with a company over “divestment”, which is where they sell a stock because it has been involved with a controversy or doesn’t meet ESG criteria, for example. Divesting or screening out a stock tends to be a last resort.

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About Author

Holly Black  is Senior Editor, Morningstar.co.uk

 

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