Shadow Boards Engagements
Borrowing from activist hedge funds playbook is something mainstream institutional investors need to seriously contemplate.
The issue of limited engagement success, in the absence of large-scale divestments, remains a perennial ESG hurdle that the responsible investing industry is yet to resolve. Building on this, I would like to focus on engagement in the context of net zero transformation, and why the current engagement model is not fit for purpose.
The transition to a sustainable net zero economy requires a fundamental transformation of sectors, industries, and business models. Transformations of this nature require a deep understanding of the micro and macro factors underpinning the value creation and capture process of a multitude of companies and industries. The knowledge base for this understanding tends to exist within companies, at the board level and not at the shareholder level.