Shareholder Engagement

Shareholder Engagement

One aspect of socially responsible investing involves shareholder engagement.

Owning shares in a company enables investors to raise environmental, social and corporate governance issues with corporate management. They often do this by filing or co-filing shareholder proposals (also called resolutions) which are voted on annually by a company’s shareholders.

The very act of filing a proposal can lead to productive discussions with a company, sometimes leading to withdrawal of a proposal. US SIF, the professional association for socially responsible investment firms, notes: “Often, a shareholder resolution will fail to win a majority of the shares voted, but still succeed in persuading management to adopt some or all of the requested changes because the resolution was favored by a significant number of shareholders.’