When we pool our customers’ money and invest it in companies, we have the muscle to demand that they behave responsibly. We’ve been doing this for years and have raised concerns about everything from carbon emissions to gender diversity. And while some companies have worked with us to resolve them, we’ve taken tough action against those that are slow to change.
It’s part of our strategy to improve returns for both retail investors and the pension funds that many of us pay into, through the integration of environmental, social and governance (ESG) considerations. These include things like climate change, diversity, human rights, and boardroom pay – we believe companies that score highly against such criteria are likely to be better run and face fewer regulatory and political risks.
Combined with our commitment to active ownership – through which we strive to raise standards and vote against boards that we don’t believe are doing enough – and our analysis of long-term investment themes, we can make a difference for investors and society as a whole. Some of the key issues we’ve been actively engaging with company boards on are sustainability, gender diversity and excessive executive pay.