The Rules of Engagement

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Quintin Rayer offers tips for ethical investors that want to strengthen their engagement with companies.

Ethical and sustainable investors focus on issues such as environmental, social, and governance (ESG) factors, UN Sustainable Development Goals, and traditional areas such as alcohol, tobacco, gambling, pornography, armaments, nuclear power, animal testing and intensive farming.

Many investors are also acutely aware of the increasing likelihood of extreme weather events and other challenges associated with global warming. Despite the Paris Agreement targets to hold global average temperature increases to less than 2°C above pre-industrial levels, current warming appears to be on track for at least 3°C by 2100.

Many fund managers engage with companies to end harmful practices. Yet engagement is opaque, and fund selectors struggle to assess managers’ commitment and progress made.

Q G Rayer (2020), The rules of engagement, Originally published in TRANSFORM magazine April 2020 © IEMA, p26-27, 3 April 2020.

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