The UK’s Investor Forum, the investor-corporate engagement body that grew out of the Kay Review, has detailed its work on engaging on marine plastic pollution.
It said that it was approached about the issue by private client fund manager McInroy & Wood, where Investor Forum chair Simon Fraser, the former Fidelity Investments CIO, is non-executive chair.
“We felt that collective investor action, to complement individual, company-specific engagements, had the potential to provide a powerful expression of investor willingness to use institutional influence in a way that is consistent with their fiduciary duties,” the forum said in its latest annual report.
It hosted an event for with members with conservation NGO Flora & Fauna International (FFI) and in March 2018 helped McInroy & Wood coordinate a letter on the issue of plastic pellets, the ‘building blocks’ of the plastics industry.
It was co-signed by 16 investors with a combined asset base of more than £2trn and was sent to consumer protection body BRC Global Standards. Investors have also now written to the International Organization for Standardization (ISO) and British Standards Institution (BSI) with a similar request, the Forum said.
“As this is an emerging area of interest, the Forum remains available to act as a mechanism for the exchange of information and ideas, and to use its network to bring together interested investors who may wish to act collectively to address the issue at a system-wide or company specific level.“Other topics under its ‘Stewardship 360’ banner included food industry sector working practices and ADR (American Depositary Receipt) voting practices.
In the report, Fraser says: “While the investment industry is investing in its ESG and responsible investment initiatives, the resources are still thinly spread over many thousands of investment positions, and often the ESG research is not fully integrated with the fundamental research process.
“Ultimately, more needs to be done to help end clients properly value their manager’s stewardship activities and to help managers to better demonstrate the value-added from these activities.”
“The Forum remains available to act as a mechanism for the exchange of information and ideas”
Membership of the forum has grown to 43 investors, including eight asset owners, with combined assets under management of £16.9trn. The forum is funded by membership fees totalling just over £900,000.
It has engaged with 23 UK companies at board level, most notably in 2018 Unilever’s ‘corporate simplification’ plans which Fraser called a “pivotal moment”.
The forum was set up in 2014, following a recommendation of the Kay Review in 2012. It was originally met with scepticism in some quarters, with star fund manager Neil Woodford memorably likening it to “herding cats”.