Nasdaq’s interviews of 30 institutional investors (over $35 trillion in AUM) from July through October 2020 revealed important insights for companies about investors’ ESG engagement-related expectations and information sourcing, including the following.
- Management engagement contacts - Investors’ main point of contact is the IRO and/or Corporate Secretary or General Counsel, with other executives such as the CHRO and head of sustainability also frequently involved, as shown here:
- Board involvement – Investors value director participation in an engagement to understand board oversight, but most investors consider board involvement to be an escalation and thus not necessary in the ordinary course.
- Reporting frameworks – Most investors are actively supporting and advocating the SASB and TCFD frameworks. Investors expressed varying degrees of support and reservations about CDP, GRI, and SDG-based disclosures, with the reservations outweighing support for both the GRI and SDGs.
- ESG ratings – Most investors use at least five ESG data providers subject to noting unique approaches or limitations associated with each and the importance of the raw data as opposed to the aggregated ESG scores.
- In-house ESG research – All investors reported having an in-house ESG research function.
Access additional resources on our Shareholder Engagement and Sustainability/ESG pages.