institutional investor survey results 2020
In this publication we focus on the ESG risks and opportunities that investors factor into their investment decisions with our report exploring these themes in greater detail. Boards and management should therefore expect a greater number of questions from investors about purpose and culture and should be well prepared to provide a coherent and well articulated response that is consistent between management and the board. All companies, regardless of their sector, should expect to be questioned on how they are managing and responding to these risks and opportunities. In effect, investors may influence issuers to refine their policies, management approaches and disclosures to meet investor and stakeholder expectations on environmental and social issues. Respondents overwhelmingly believe that active ownership (91%) is the most effective way to help positively influence companies to adopt positive environmental and social policies. This post is based on their Morrow Sodali memorandum. Institutional Investorâs 2020 Emerging EMEA Executive Team polling, now fully integrated with Extel, will start soon. Investors are sending a very clear message that it is not what a company says on paper, but rather how its top representatives communicate their purpose and culture that sets the ‘tone at the top’ and filters through all levels of the organization. 2020 Institutional Investor Research Survey results February 4, 2021 - 2 minutes The votes are in for the 2020 Institutional Investor Research Survey rankings, and we are proud to share that the efforts and support of our U.S. strategy teams are reflected in the results. This year, an overwhelming 100% of investors indicated that misalignment between pay and performance is the primary factor to consider voting against executive remuneration. KEY DATES: The survey comprised of nearly 800 U.S. and European investors including financial advisors, family offices, crypto and traditional hedge funds, high … These responses are an encouraging sign that investors are seeking to work with the company in a positive way to achieve good outcomes rather than taking a combative approach. There is no question about the importance investors attach to direct engagement between companies and their shareholders. June 1 – June 26, 2020 2020 Institutional Investor All-America Research Survey. Ann Selzer Explains How She Got It Right. We work hard every day to deliver differentiated insights in our fundamental and Washington policy research. Some of the trends identified in our 2019 survey have continued into 2020. Doubling down on the trends observed in recent years, investors continue to invest heavily in stewardship resources enabling them to influence corporate decisions relating to ESG and sustainability. This unequivocal result confirms the growing importance to investors of ESG factors, whether risks or opportunities, in their investment decisions. £âm unless stated 2020 2019 Change Underlying1 change Revenue 335.3 401.7 (17%) (4%) Your vote for Cowen is an important recognition of our effort, and ⦠Obtain an updated view of investor perspectives on ESG ratings to compare to the results from the Rate the Raters 2019: Expert Survey Results. We note that one in two respondents ranked explicit statements and robust ethical policies as the third or fourth sources of information that they consider when evaluating a company’s corporate purpose and culture; however they do not rely on these as primary sources of information. A significant majority (64%) of respondents request engagement with the board for the purpose of building a constructive two-way relationship. UK Residential Property: Institutional Attitudes and Investment Survey 2020 3 3 The figures for overall real estate and residential exposure are gross figures and do not adjust for potential double-counting through indirect investment in funds, joint ventures, etc. As environmental and social topics increasingly become a focal area for engagement, issuers should be prepared to demonstrate a clear understanding of material risks and opportunities and provide meaningful disclosures that meet investor expectations. As a result, they will need to tailor their disclosures to their own circumstances mainly with regard to increases in cost and potential negative influence on revenue. Influential stakeholders including governments, NGOs and asset owners, and the endorsement of key initiatives such as Climate Action 100+ and TCFD have encouraged shareholders to intensify their engagement focus and even file shareholder resolutions specifically tackling ESG-related issues. 30% said there are sufficient routes for shareholders to express their views on non-financial matters whilst equally 30% supported ‘say on sustainability’. At this formative time for ESG reporting, most see this as a vote over the robustness of the figures rather than the appropriateness of the performance. Euromoney Institutional Investor PLC (âEuromoneyâ or âThe Groupâ), the global B2B information services provider of price discovery, essential market intelligence and events, announces results for the year ended 30 September 2020. Finally, rounding out non-financial factors to support an activist included an unclear business strategy (23%) and lack of responsiveness to shareholder concerns (14%). Although climate change will have an impact for every business, different companies will be affected by climate change in different ways. To participate in a survey or to request a vote please sign up here: Sign Up. A majority of respondents, 59% selected ‘engagement with management’ as their first choice to influence the board. Institutional Investor Survey 2020 LOOKING FORWARD The results of this yearâs survey confirm the global trends that are rapidly transforming the relationship between corporations and their institutional investors. To determine the members of Institutional Investorâs 2020 All ... including those who cast and received votes in this yearâs 2020 All-Asia Research Team survey. Explore the results below. In response to this question, an overwhelming 91% of respondents selected ‘engagement at the board level’ as the most effective way to influence board policies and decisions. Two institutional investor provided responses to ISS without taking the online survey bringing the total investor responses to 128. The research was conducted in April 2020, as the scale and global impact of the Covid-19 crisis had taken hold. ... Institutional Investor LLC is part of the Euromoney Institutional Investor PLC group. The complete publication, including footnotes, is available here. Related research from the Program on Corporate Governance includes The Agency Problems of Institutional Investors by Lucian Bebchuk, Alma Cohen, and Scott Hirst (discussed on the Forum here). Likewise, we are seeing more clarity on the direction of corporate reporting, with progress made in reporting against frameworks such as the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. In the last few years, this has changed dramatically as investor focus has shifted from engaging on financial performance to seeking engage across non-financial, ESG topics. Of the institutional investor respondents, 69 percent represented asset managers, 18 percent represented asset owners, and three percent represented both. The growing attention by investors in relation to material non-financial topics is a continued thread in this survey. Chart VI Private Equity Allocations. 2020 Institutional Investor Research Survey results February 4, 2021 - 2 minutes The votes are in for the 2020 Institutional Investor Research Survey rankings, and we are proud to share that the efforts and support of our U.S. strategy teams are reflected in the results. This yearâs survey included over 300 more investors than last yearâs, with a deeper dive into investor segments and the European market. Results are based on responses from 271 institutional investors globally. Morrow Sodali’s 2019 Institutional Investor Survey highlighted the importance of a company’s disclosure and dialogue around sustainability and climate change strategy for investment decision making. Q.5 81% of investors indicate that poor disclosure of performance targets may lead to a vote against executive remuneration-related resolutions. Even if there is no consensus among investors on exact expectations, they generally recognize the benefit for a company in defining a corporate purpose that should be tied to its core business as well as delivering wider benefits to stakeholders. The Euromoney Real Estate Survey 2020 is our 16th annual survey of the global real estate markets and canvasses the opinions of the leading firms involved in the real estate sector worldwide. Schrodersâ annual Institutional Investor Study analyses the investment perspectives of 650 institutional investors, collectively responsible for $25.9 trillion in assets and from 26 locations across the world. • Reputational risk was the next most important ESG risk impact (45%). The Morrow Sodali Survey highlights the main areas of focus for institutional investors in determining how to exercise their voting rights at 2020 annual shareholder meetings. Notably, almost half of investors would consider voting against a director to influence outcomes. While the concept of corporate purpose is not new, over the past 12 months it has gained momentum following significant value destruction and reputational damage over recent years as a result of corporate scandals. Congratulations to Exane and … APAC +61 2 8022 7940, SITE MAP Nevertheless, focus on the topic of corporate purpose is becoming more common among major listed companies and a significant driver in strategic thinking among corporate executives. INSTITUTIONAL INVESTOR DIALOGUE. This has resulted in a greater emphasis on how companies at the very least respond or address these concerns. The proprietary research surveys 600 institutional investors in six countries representing firms that collectively manage over $20 trillion in assets. RBC and BMO Capital Markets dominate the leaders table as this year’s top research providers for All-CanadaNEW YORK, Oct. 22, 2020 (GLOBE NEWSWIRE) -- The Institutional Investor All-Canada Research survey determines the best-in-class of sell-side research teams and provides valuable qualitative market feedback from market participants on optimising the provision, acquisition and … However, if engagements do not meet investor expectations, or, if there is a lack of engagement from either the company or the investor, then investors are not opposed to supporting shareholder proposals to encourage companies to take action. ... Investment Content Marketing Survey and Forecast 2020 (Savvy Insights) Savvy Investor04 Sep 2020. This correlates with the acceleration of investor action on a global basis that is focused on delivering climate solutions and mitigating the financial impacts presented by climate change. In a comprehensive survey of almost 800 institutional investors across the U.S. and Europe, 36% of respondents say they are currently Reinforcing the thematic of board accountability, almost one in five respondents, 18% believe the most effective way to influence board decisions is by voting against individual directors. Since 2016, we have continued to see a trend in our surveys where institutional investors are demanding greater transparency, including more contact and engagement with independent directors. Schroders’ annual Institutional Investor Study analyses the investment perspectives of 650 institutional investors, collectively responsible for $25.9 trillion in assets and from 26 locations across the world. Shareholder activists were successful in roughly 46% of global proxy fights in 2019. Schroders commissioned Raconteur to conduct, between 30 April and 15 June 2020, an independent online study of 23,450 people in 32 locations around the world, including Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, the Netherlands, Spain, UAE, the UK and the US. This position has been adopted by major institutional investors who have urged companies to pay more attention to long-term success and recognize that ESG topics represent material risk and opportunities directly impacting financial performance. As anticipated, it was clear that 2019 marked a turning point in incorporating ESG factors into mainstream investing as investors recognize the growing risks of non-financial factors. Q.1 All respondents state that ESG risks and opportunities played a greater role in their investment decisions during the last 12 months, with climate change being top of investors’ list (86%). Pay remains a critical area for engagement between investors and portfolio companies as investors seek to better understand a company’s pay philosophy and how it creates a true pay-for-performance culture. The survey findings were resounding. Connecting this with shareholder engagement, the logical consequence of this purpose-led mindset is increased investor focus on how boards and management define and articulate corporate purpose. Q.8 Activism: investors are more likely to support activists’ case if the company portrays weak governance practices (64%) and less surprisingly, if it can be shown that there is a track record of misallocation of capital (50%). 2020. Morrow Sodali’s survey explores how ESG, as a very broad concept, can transpose itself to the pragmatic issues of shareholder meetings, voting ballots, and to other forms of stewardship measures. Investors expect to be privy to the inner workings of the board, underlining the importance of. A minority of investors sought engagement with the board for the purpose of deciding how to vote on shareholder proposals (14%) and at times of adverse media or controversies. Whilst maintaining the overall structure of the survey, we decided to explore these themes in more-depth. March 6th, 2020, including interviews with 774 institutional investors. Anecdotal feedback gathered from respondents indicates that the decline is a result of investors obtaining good information and establishing good lines of communication around these issues. Investor concerns and attention on executive pay have not waned—spanning all markets. The concept of corporate purpose could emerge as a central theme, enabling companies to express their own uniqueness in sustainable value creation. To view a copy of the full 2020 report, click here. Many investors express a need for more explicit non-financial information, which they see as an important indicator of underlying corporate culture, integrity and sustainability. The results of the survey for Romania will be announced in Autumn, during ARIR Gala, when best practices in Investor Relations will be recognized. 2020. Q.2 Overwhelmingly 91% of respondents expect companies to demonstrate a link between financial risks, opportunities and outcomes with climate-related disclosures. We work hard every day to deliver differentiated insights in our fundamental and Washington policy research. These responses were not aggregated in the survey results but A total of 68% respondents believe that greater detail around the process to identify these risks and opportunities would significantly improve companies’ climaterelated disclosures. 2 How will ESG performance shape your future? Understanding what is important to shareholders is critical in addressing concerns and securing their voting support. However, the total number of high-impact campaigns (e.g. To that extent, respondents widely agree (81%) that stakeholder engagement approach and outcomes should be included in companies’ disclosures when explaining their corporate purpose. Q.10 Investors widely agree (81%) that stakeholder engagement approach and outcomes should be included in companies’ disclosure when they explain their corporate purpose. Hence, most investors (71%) expect companies to clearly disclose how the board and management were involved in the implementation of this corporate purpose. Issues relating to ESG, sustainability, corporate purpose, culture and stakeholder interests have joined corporate The proprietary research surveys 600 institutional investors in six countries representing firms that collectively manage over $20 trillion in assets. June 1 â June 26, 2020 2020 Institutional Investor All-America Research Survey. Q.12 Last year, a total of 83% of respondents indicated that the key ESG topic that needed an improvement in disclosures was human capital. £’m unless stated 2020 2019 Change Underlying1 change Revenue 335.3 401.7 (17%) (4%) Human capital management remains the second most important topic with 64% citing it as a focus (up from 54% in 2019). Investors are seeking insights into the interactions between management and board members and understanding the key decision-making processes around setting and monitoring the business strategy and overall risk assessment including audit, remuneration, climate risk management and capital management decisions. In our 2019 survey, 85% of respondents indicated that climate change would be a key sustainability topic for board engagement followed by 54% who said they would engage on human capital management and corporate culture. Research Institutional Investor Research is recognized as the leading provider of independent, qualitative feedback, for all three sides of the investment community A further 22% focus only on ESG frameworks or ESG rating agencies. However, the results also show that investors are prepared to consider shareholder activism where board and management engagement fails to deliver adequate responsiveness. To meet expectations around articulating corporate purpose and culture, explicit statements or disclosure of quantitative human capital indicators are not sufficient. Investors are overwhelmingly united in their responses that proactive and regular engagement with both management and the board, 95% and 86% respectively, informs their evaluation of a company’s corporate purpose and corporate culture. In our 2019 survey, 65% of investors said pay-for-performance remained the most important consideration when evaluating executive remuneration. Further, companies will need to provide evidence that pay incentives are linked to corporate purpose as stated by 71% of respondents. Rate the Raters 2020 investor survey and interview results Rate the Raters attempts to better understand the universe of external sustainability ratings and to influence and improve the quality and transparency of such ratings. • Climate change had the highest ESG impact on investment decisions (86%) Corporate purpose and culture remained a top three focus topic but declined to 36%, down from 54% last year. In our 2020 survey, investors overwhelmingly continue to rank climate change (91%) as an engagement priority. Q.14 ‘Say on sustainability’ is a concept that investors did not strongly agree or disagree on. And furthermore, how companies effectively use corporate purpose to promote a high-performing culture. Institutional Investor Survey - 2020 Morrow Sodali To view this article you need a PDF viewer such as Adobe Reader.