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. We find a two-tier engagement strategy, combining lead investors with supporting investors, is effective in successfully achieving the stated engagement goals and subsequently improving target performance. An investor is more likely to lead the collaborative dialogue when the investor’s stake in the target firm is higher and when the target is domestic. Success rates are elevated when the lead investors are domestic, supporting investors are international, and the investor coalition is 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