More than half of investors expect IR involvement when engaging on sustainability

Fifty-six percent of investors say they generally expect to engage with investor relations on sustainability issues, according to the latest survey from SquareWell Partners.

The IR team comes behind the sustainability team, which 85 percent of investors say they expect to engage with on such topics. Thirty-eight percent say they expect corporate secretaries or legal to be present, while 37 percent expect HR or compensation.

Just a quarter say board members are essential to these meetings, 24 percent say they are a ‘nice to have’ and the remaining 51 percent say it depends on the topic.

Asked what the top E and S topics are for 2022, the overwhelming response on the environmental side is climate change and the energy transition, with 93 percent of investors citing this as a top priority. This is followed by biodiversity, cited by just over half (54 percent) of respondents, while waste and water are a priority for almost half (49 percent each).

On the social side, more topics are considered a high priority for investors. Diversity and inclusion comes first, with 93 percent of investors saying this is a top priority for the year, followed by human capital management (83 percent), supply-chain management (71 percent), human rights (68 percent) and data privacy (67 percent).

In the same paper, SquareWell sets out its argument for splitting governance from the ESG acronym, saying ‘governance should be viewed as the means of facing environmental and social risks and opportunities – not as an isolated element.’

It also asked investors what governance themes are top of the agenda for the coming year, with board effectiveness (35 percent), executive pay (88 percent) and shareholder rights (71 percent) topping the list.

Just 19 percent of the investors surveyed (excluding responses from proxy advisers) say portfolio managers do not get involved in engagement. Environmental and social issues are where they are most likely to get involved, with 61 percent of respondents saying portfolio managers play a part in discussions on these topics, followed by issues related to the board (53 percent) and pay (50 percent).  

Researchers surveyed 41 organizations, representing asset managers, asset owners and proxy advisers, between October and December 2021, asking about key themes for 2022 as well as how investors plan to manage stewardship. The total assets under management represented is $25.2 tn.