There is an ever-increasing importance placed on investing responsibly in order to solve the most important ESG issues facing the world today. Investment funds and asset management companies need to adhere to new regulations, such as the UK Stewardship Code 2020. Often, they struggle to work effectively and efficiently with their investee companies to execute solutions to these pressing issues. This means there is a sector-wide challenge of capturing real-time data on ESG, various impact frameworks and their engagements with investee companies.
What is engagement and why does it matter?
The FCA Stewardship Code 2020 defines engagement as ‘the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment and society.’ This means that effective engagement around ESG issues is one of the best ways investors and asset managers can make a meaningful difference and ensure that capital is allocated responsibly.
What is the market challenge and what is the Maanch solution?
Members of The Investment Association reported an average of 158 engagements per asset manager over the year ending 30th June 2018. Yet, even with asset managers initiating hundreds of engagements a year, over 80% use manual, ad hoc, and inefficient data management methods.
We at Maanch are therefore delighted to announce the upcoming release of our first-to-market Engagement Tracker (ET) for Investors and Asset Managers. The ET helps investors more effectively log engagements and measure their impact in accordance with the 2020 UK Stewardship Code.
The Maanch Engagement Tracker
Fund teams will be able to use the Maanch ET to input a variety of engagements with their portfolio companies. For example…
Issues– They can report issues such as wanting investee companies to report against the TCFD, or flagging concerns about an investee company’s supply chain.
Interactions– They can input any meeting, letter or email with an investee company. Any relevant notes can also be uploaded, and topics of conversation can be aligned with the GRI taxonomy.
Voting– They can record all proxy votes and their outcomes on the tracker- and easily report on each engagement decision and its impact.
Data visualisations are automatically generated at the organisational, fund and company level. Enabling and delivering a digital data trail in this way is essential to demonstrating responsible investment. As all engagements can be recorded and updated in minutes, this saves both time and money. Our conservative estimate is that using our ET increases user efficiency by 20 times.
No longer is it just specialist groups that are trying to drive ESG and Impact focused practices in their investee companies. It is now becoming the expectation that all asset owners, asset managers and investors become active participants in supporting, driving and monitoring the Impact Revolution. By being aligned to the latest regulatory recommendations (such as the UK Stewardship Code, the UN Sustainable Development Goals and the GRI taxonomy), the Maanch ET supports its users in adhering to these changing expectations. In other words, it sets them up for a future in which they will have to prioritise ESG and Impact factors into every aspect of their decision-making.
Ignoring ESG-related issues has never been sound investing practice. However, spurred on by rising awareness surrounding climate action, investing practices have reached a turning point. In today’s world, not investing in ESG is more risky than actively investing in ESG… or than actively pushing your investee companies to take ESG factors into consideration.
This is what makes the Maanch ET such a timely and practical market solution. Cost-effective and data driven, it will simplify much of the complexity surrounding ESG and Impact data tracking and reporting for investors and asset managers. We hope it will empower the sector to accelerate impact towards a more sustainable future.
Blog by Maanch team member Anna Wallich.