Our 2022 ESG manager survey findings reinforced our belief that the integration of environmental, social and governance (ESG) factors into investment processes is here to stay. Stewardship, and the use of the rights and a position of ownership to influence the behavior of issuers, is key to this integration, and a core part of Russell Investments’ investment process. For this reason, we dedicate one portion of our survey to active ownership, and we conduct a deep-dive review of the responses. This informs our industry views, our expectations for the investment managers we assess, recommend and hire, and our own practices. So, let’s get started by digging into the responses.
ESG not always on the agenda
While our research and observations note rising efforts around active ownership generally and engagement specifically, ESG topics are not always covered in engagement activity. Over half of the managers who responded to the survey stated that they hold regular meetings with management, and they occasionally cover ESG topics. Just over one-third of them indicated they hold regular meetings with management in which they always discuss ESG issues.
Higher numbers do not necessarily mean better stewardship
Looking at the number of engagements held by respondents, the survey shows a wide range of responses as set forth in the table below:
|Number of engagements||Percentage of respondents|
We believe that the disparity in numbers across managers indicates that the definition of engagement is not standardized, and this leads to different outcomes in terms of counting. At Russell Investments, we define engagements as dialogue undertaken to understand, influence and/or improve ESG practices and disclosures.1 Engagement can refer to interactions between the investor and current or potential investees (which may be companies, governments, municipalities, etc.) as well as with standard setters on ESG issues.