New €22bn European institutional shareholder engagement group launched

A new shareholder engagement lobby, focusing on ethical and responsible investment issues, has been launched by a group of European institutional investors.

The network, called the Shareholders for Change (SFC) and set up by a group of European institutions with assets of over €22bn, said its main aim was to consolidate efforts on ethical issues around European blue chip firms.

“We felt that there was a lack of co-ordinated effort in dealing with European companies, and we believe this platform has the ability and agility to deal with issues which we feel we need to focus on together,” said Laura Berry, vice president of Etica Sgr’s Ethical Committee and advisor to the network.

Berry is the former Executive Director of the Interfaith Center on Corporate Responsibility, the US faith investor group. She said that while there were investor engagement groups in the UK and the US, European investors lacked the necessary support on shareholder engagement.

“So for example, if we have an Italian fund manager and a French fund manager who have shared issues around an Italian company, there is no platform or forum for them to be able to come together to discuss these issues. So there is a gap in the market for a cross-border network like this,” she added.

Founding members of the group include a mix of European banks, foundations and asset managers: the German-based Bank für Kirche und Caritas, the French fund managers
Ecofi Investissements, Meeschaert Asset Management and Groupe Crédit Coopératif, the Italian Etica Sgr, Gruppo Banca Etica, and the Fondazione Finanza Etica, the Austrian fair-finance Vorsorgekasse and the Spanish Fundacion Fiare.“This is a group that has worked together informally on various issues over the past several years, so this is a kind of formalising of the arrangement they have to create a mechanism where they can come together to fulfill their shared commitments and interests,” she said.

She added that unlike other shareholder groups, the SFC would work more as a facilitating hub, rather than a structured organization, which meant that most of the group’s conversations would take place virtually, with more effort spent on attending annual general meetings and organising meeting with companies.

“We felt that there was a lack of co-ordinated effort in dealing with European companies”

Andrea Baranes, president of the Italian Fondazione Finanza Etica, which coordinated the launch of the new group, said: “Our goal is to organise joint participation in European AGMs, co-sign letters to companies, submit resolutions, organise meetings with corporations and discuss new engagement activities.”

Meanwhile, further speculation has emerged about the fate of Hermes Investment Management, the fund manager owned by the BT Pension Scheme that is known for its engagement principles. Reuters and other media have cited unnamed sources as saying US-listed fund manager Federated Investors is considering a bid for Hermes. Other potential buyers include Challenger, Old Mutual Asset Management and Eaton Vance, the report added. Hermes, Eaton Vance and Federated declined to comment to Reuters.