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Thematic Engagements: Roundtable Summary

By Team Maanch  |  
December 14, 2023  |  
3 minutes read

November 2023

Balancing Alpha and Positive Impact

  • Proving “causality” is metaphorically compared to seeking the Holy Grail. While engaging with partners, witnessing success at various stages and tangible outcomes, the lingering question persists: Is it this direct result of our engagement or the combined impact of shared actions with other contributors?

  • The challenge for asset managers is to clearly show how their efforts, like reducing risk to increase profits, directly lead to actual results. Although there are steps to track progress and collaboration with partners, it’s hard to say for sure if these results come only from their work. It’s difficult to tell if it’s their actions, others’, or a combined effort that makes the difference. This situation makes it complex to prove a direct cause-and-effect link and involves carefully examining and interpreting the evidence.

Identifying Material ESG Themes

Balancing client priorities

  • Balancing client interests and regional considerations, themes must be established annually to address material concerns while accommodating diverse demands. Challenges arise when client priorities diverge from designated focus areas, requiring a nuanced approach to reconcile commercial considerations with stewardship priorities. Balancing established priorities & specific client interests ensures a comprehensive approach to stewardship, emphasising the importance of client service.

Financial materiality in focus

  • Prioritising financial materiality in engagement directs investment teams to address idiosyncratic issues in portfolios. The focus must be on aligning client priorities with effective engagement, bridging the gap between ambitious, less financially material topics and their increasing relevance. This approach facilitates teams’ engagement on crucial matters like human rights, ensuring direct influence on companies within portfolios.

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