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Institutional investors predict a surge in shareholder activism over the next three years, according to research from London-based CoreData. A survey of 150 institutional investors in November and December found that 91% expect to see swelling interest through 2023, compared to 81% who said activism has increased over the last three years.
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Environmentalism will drive much of that interest, according to the research, with large majorities saying they can influence various issues, including:
- Environmental protection, 74%
- Renewable energy, 73%
- Clean technology, 68%
- Energy and climate, 67%
Investors were less confident about the influence they had over issues like gender equity, health and well-being or education, with roughly half saying they could influence each of these issues.
Unsurprisingly, belief in their potential influence was related to investor engagement. The study found 43% of investors are highly engaged with renewable energy and clean technology, or 42% or highly engaged with social and environmental benefits.
"These findings strongly indicate that U.S. institutional investors are becoming more active as shareholders and that issues around the environment, and particularly climate change, will see shareholder activism become increasingly important over the next few years," Andrew Inwood, founder and principal of CoreData, said in a statement.
Investors clearly believe they're role as institutional investors puts them in position to bring about change, however, there was some disagreement about how much responsibility falls on their own shoulders. The report found two-thirds think their organization is "partly or completely responsible for advocating for change," while 84% say other institutional investors are responsible.
"Investors expect asset managers to fulfil their responsibilities to push for positive change," Inwood said. "Managers need to demonstrate they are good stewards and owners of companies."
CoreData also found that the pandemic has affected how institutional investors engage with companies, as 24% say there have been fewer proxy fights over the last six months.
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