Coordinated Engagements

Abstract

We study the nature of and outcomes from coordinated engagements by a prominent international network of long-term shareholders cooperating to influence firms on environmental and social issues. A two-tier engagement strategy, combining lead investors with supporting investors, is effective in successfully achieving the stated engagement goals and is followed by improved target performance. An investor is more likely to lead the collaborative dialogue when the investor’s stake in and exposure to the target firm are higher, and when the target is domestic. Success rates are elevated when lead investors are domestic, and when the investor coalition is capable and influential.

Keywords: engagement, dialogue, activism, collaboration, coordination, corporate social responsibility (CSR), environmental social and governance (ESG), socially responsible investing (SRI)

JEL Classification: G15, G23, G32, G34, G39