Collaborative Investor Engagement With Policymakers: Changing the Rules of the Game?

Abstract

Purpose
Applying universal ownership theory and drawing on a multiplecase study design, this study aims to analyze what drives institutional investors to engage with government entities and what challenges they find in the process.

Design/methodology/approach
The authors relied on document analysis and conducted 12 semi-structured interviews with representatives from asset owners, asset managers, investor associations and academia.

Findings
The authors identify a trend where investors conduct policy engagement to fulfill their fiduciary duty, improve investment risk management and create an enabling environment for sustainable investments. As for engagement challenges, investors report the longer-term horizon, a perceived limited influence toward governments, the need for capacity building for investors and governments, as well as the difficulty in accessing government representatives.

Originality/value
This research contributes to filling a gap in the literature on this new form of investor activism, as a growing number of investors engage with sovereign entities on environmental, social and governance issues.

Keywords: shareholder engagement, shareholder activism, environmental social and governance (ESG), public policy engagement, sovereign engagement, sustainable finance, universal ownership

JEL Classification: G15, G23, G32, G30, G34, G39