IN FOCUS6-8 min read

Active ownership: three ways to improve investor engagement

Our latest analysis of best practice includes the findings of a survey of 350 investee companies from 45 countries, a GMO crops engagement case study and our formula for successful engagement.

WM secondary brand image


Olga Cowings
Active Ownership Operations and Insights Manager

In the latest research from Schroders’ active ownership team, we consider some of the opportunities and challenges for effective investor engagement.

A survey of more than 350 investee companies from 45 countries was conducted to gather feedback on investor engagement, to help us understand strategic issues and help investees manage material risk.

From questions around ESG disclosure to the relevance and materiality of engagement topics, we have summed up the main themes from our analysis in this document: Three ways to improve investor engagement.

Follow the link for the full details. This study follows our analysis on governance and returns, published earlier this month: Active ownership: how does engagement work and does it impact returns?

What are three ways to improve investor engagement?

We firmly believe engagement is not a one-way street. By listening to the feedback from companies in our investment portfolios, we can understand motivators, barriers, and practical actions to improve our stewardship activities. In short, our formula for successful engagement is as follows:

1. Use your influence

Use influence well, providing constructive feedback to investee companies and building consensus on expectations with other investors.

2. Dig deeper

Dig deeper to understand business practices and whether third-party ESG ratings are reflective of performance and strategy.

3. Bring in the experts

Bring in experts from both sides, leveraging the in-depth understanding of international standards and good practice from sustainability experts, and advice from investment desks on capital allocation.

Investors should prioritise quality over quantity – both in investment and engagement – seeking to build trust, create transparency, and drive accountability. This is best done through direct one-to-one feedback and collectively raising major concerns in collaboration with other investors.

What are the findings of our investee survey in a nutshell?

The findings of our investee survey include that respondents felt there should be more investor consensus on international ESG standards and reporting frameworks, that it can be difficult to determine what disclosure to prioritise, and that there is a lack of understanding of international standards in markets with more nascent engagement.

As one vice president of investor relations at a pharmaceutical company put it: “I would like to see the world’s largest asset managers take a look at all these standards and ratings and create consensus on expectations for corporates”.

Lacking coordination within investor organisations was cited as the biggest barrier to effective investor engagement (27%), followed by confidentiality (21%) and irrelevant topics/lack of materiality (20%).

Additionally, when asked an open-ended question on barriers or opportunities for effective investor engagement, 29% of respondents pointed to ESG disclosure and third-party data, and many expressed concern about the automation of ESG data collection and processing.

Shortcomings of AI use by ESG ratings providers could include systems missing company updates where information is behind a paywall or not machine-readable and differing methodologies providing varying assessments of a company’s performance on material ESG issues.

Overall customers (55%) are the most influential force when it comes to encouraging business to take action on material ESG issues, followed by the investment community as a whole (39%) and political will/government policy (38%), according to our survey of investor relations professionals.

But investor engagement is on the rise. Large companies are particularly well-equipped to engage with investors, with just one in ten citing resourcing as a barrier to engagement, compared to nearly double that (18%) for smaller firms.

The ESG landscape is particularly perplexing in markets with more nascent engagement (Latin America, Middle East and Emerging Markets). Nearly a quarter of respondents from those markets cited lack of understanding of international standards as a barrier – nearly three times the rate of other markets – so extra background information is needed when engaging here.

Case study: balancing sustainability risks and opportunities at a major pharma and crop science firm

The case study in this report is about a major pharmaceutical and crop science company that Schroders began engaging with in 2005, at a time when it was focused on improving crops’ capacity to withstand climatic extremes.

It was facing public interest in product safety and the potential environmental impact of Genetically Modified Organisms (GMOs).

Through engagement, Schroders wanted to understand how the company was assessing and managing risks such as biodiversity-loss and adverse affects on human health.

In 2016, the company announced an intention to acquire a leading producer of genetically modified seeds and herbicides, and Schroders met with the CEO to discuss the potential risks.

In the following years, Schroders continued engaging on corporate culture, product safety and stakeholder relations.

By 2021, the company was flagged as a potential violator of the UN Global Compact by an independent third party, and Schroders requested increased transparency on product safety and environmental impact.

The UK and European credit investment desk began engaging this company in 2021. We requested increased transparency on product safety and environmental impact, improved reporting comparing practices to peers, and meaningful engagement with stakeholders including independent ESG assessors.

Speaking with the company’s sustainability experts the following year, we were encouraged by their detailed research on the impact of different genetically modified products.

Transparency improved: they began granting access to full safety study reports submitted to and evaluated by regulatory authorities, as well as publishing educational resources on the safety of their products.

In 2022, the controversy-related flag was removed by the third party and the company's ESG rating improved. Schroders then progressed its engagement to consider a wider set of risks and opportunities, particularly its climate and social impact ambitions.

We will continue monitoring progress.

The full report can be found here.

Subscribe to our Insights

Visit our preference center, where you can choose which Schroders Insights you would like to receive

The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.


Olga Cowings
Active Ownership Operations and Insights Manager


Natural Capital
Climate Change
Follow us

Please consider a fund's investment objectives, risks, charges and expenses carefully before investing.

The website and the content included is intended for US-based financial intermediaries (and their non-US affiliates) on behalf of those of their clients who are both (a) not “US persons” as that term is defined in Rule 902 under the United States Securities Act of 1933, as amended (the “1933 Act”) and (b) “non-United States persons” as that terms is defined in Rule 4.7(a)(vi) under the Commodity Exchange Act of 1936, as amended. None of the funds described herein is registered as an “investment company” as that term is defined in the United States Investment Company Act of 1940, as amended, and shares of the funds described herein have not been and will not be registered under the 1933 Act or the securities laws of any of the states of the United States. The shares may not be offered, sold or delivered directly or indirectly in the United States or for the account or benefit of any “US person.”

The information contained in this website does not constitute an offer to purchase or sell, advertise, recommend, distribute or solicit a subscription for interests in investment products in any Latin American jurisdiction where such would be unauthorized. The information contained in this website is not intended for distribution to the public in general and must not be reproduced or distributed, entirely or partially to any individuals who are not allowed to receive it according to applicable legislation. The investment products and their distribution may not be registered in Latin America, and therefore may not meet certain requirements and procedures usually observed in public offerings of securities registered in the region, with which investors in the Latin America capital markets may be familiar. For this reason, the access of the investors to certain information regarding the investment products may be restricted. Financial intermediaries and Advisors must ensure the information provided in this website is appropriate and suitable to the receiver’s domicile and jurisdiction and according to the applicable legislation.

For illustrative purposes only and does not constitute a recommendation to invest in the above-mentioned security/sector/country.

Issued by Schroder Investment Management (Europe) S.A., 5 (“SIM Europe”), rue Höhenhof, L-1736 Senningerberg, Luxembourg. Registered No. B 37.799

Schroder Investment Management North America Inc. (“SIMNA”) is an SEC registered investment adviser, CRD Number 105820, providing asset management products and services to clients in the US and registered as a Portfolio Manager with the securities regulatory authorities in Canada.  Schroder Fund Advisors LLC (“SFA”) is a wholly-owned subsidiary of SIMNA Inc. and is registered as a limited purpose broker-dealer with FINRA and as an Exempt Market Dealer with the securities regulatory authorities in Canada.  SFA markets certain investment vehicles for which other Schroders entities are investment advisers.

Schroders Capital is the private markets investment division of Schroders plc.  Schroders Capital Management (US) Inc. (“Schroders Capital US”) is registered as an investment adviser with the US Securities and Exchange Commission (SEC).  It provides asset management products and services to clients in the United States and Canada.  For more information, visit

SIM (Europe), SIMNA, SFA and Schroders Capital are wholly owned subsidiaries of Schroders plc.