Shareholders attempt to change environmental, social and governance (ESG) practices and policies of the firms they invest in by establishing with them a long-term relationship we refer to as shareholder engagement.
Shareholder engagement is initiated by shareholders with a formal expression of a concern in a written letter; typically continues with the filing of formal resolution or proposal to be voted by all investors at annual company meetings; advances through private dialogue between shareholders and corporate executives; and leads to concrete changes thanks to a wise articulation of conflict and collaboration at different stages of the process.