One of the central tenets of responsible investment is engagement with investee companies. This is enshrined in the PRI’s Principle 2, “We will be active owners and incorporate ESG issues into our ownership policies and practices,” and it is practiced by more than 85% of PRI signatories with listed equity holdings. The PRI encourages and facilitates collaborative engagement, yet robust evidence of its effectiveness in driving corporate change and creating value for investors remains elusive.

Our detailed study, summarised here, provides the first detailed, global evidence of the impact of collaborative engagements. We find that successful engagements improve profitability at target companies, and we identify the key characteristics that lead engagements to be successful.