ESG engagement is a two-way dialogue to share perspectives between investors and investees.
Engagement Definition: ESG engagement involves active communication between investors (e.g., asset managers, shareholders) and investees (e.g., companies) to discuss ESG issues and improve sustainability practices.
Purpose: The goal is to influence company behavior, enhance ESG performance, and align business practices with sustainable investment objectives. This dialogue allows both parties to share perspectives, address concerns, and work towards common goals.
Two-Way Communication: Effective ESG engagement requires open and ongoing communication, ensuring that both investors and investees contribute to the conversation and decision-making process.
CFA ESG Investing References:
The CFA Institute’s guidance on ESG engagement highlights the importance of two-way dialogue between investors and investees to foster better ESG practices and drive positive change in corporate behavior.
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