Engagement is a critical step in the fiduciary value chain for asset owners, which can drive real world change. Effective engagement demands accountability from asset managers and in turn company management. In this article, we consider a case study of engagement activity by equity managers, on the issue of child labour in the cocoa industry.

Stewardship is a tool that asset owners and asset managers have at their disposal to drive better outcomes. The Principles for Responsible Investment (PRI) identify that relationship-building between companies and investors can have many benefits, with engagement playing a key role in protecting long-term investment value for shareholders. They note that engagement should involve purposeful consideration, monitoring and intervention regarding ESG factors affecting investee companies. Asset owners’ engagement with their managers is equally as valuable, its importance being emphasised through the new UK Stewardship Code and recent government-sponsored reports.

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