Active Ownership and ESG Performance

Abstract

This chapter will examine the literature on active ownership and the influence that large shareholder groups can exert on companies to achieve better ESG performance. It will ask: How do large shareholders exert influence? What strategies do they adopt? Are these strategies effective? The chapter will also propose a theoretical model to evaluate the effectiveness of shareholder engagement. The model will be illustrated through case studies of shareholder engagements conducted by a number of fund managers.

Keywords: active ownership, ESG performance, responsible investment, investor engagement, ESG engagement, CFP, CSP, financial performance, Dell, Gap, labor standards, supply chain, Calvert, stakeholder salience