This year, the cohort of retail shareholders who want to influence companies has gained support among older (57+) investors – up from 4% of investors last year to 15% in 2022. They remain confident investors – more so than the average – and are in it for the long term. 34% describe themselves as “fully confident and informed” versus 28% of the whole sample. They are also more likely to be employees (25%) versus non-employees (14%).
The sector has not been immune from stock-market gyrations, and the performance of many ESG stocks has suffered in the last 12 months. Of those keen to influence companies, 47% have replaced some stocks with shares that they believe offer a better return. But they could just be tweaking portfolios to align with the economic cycle. Looking at the data as a whole, it looks like a temporary setback for the ESG movement, at worst.
Focus on what matters to you
Ahmadi says many companies she works with have great ESG-related initiatives – they are already doing good work in this area. But their investor communications on the subject are inadequate, so they need to bridge that gap.
“One problem is it’s easy to get lost when trying to figure out what ESG factors to communicate,” she says. “Many companies think they need to disclose everything about subjects from climate change to diversity and cybersecurity. They do not know how to start. “My advice is focus on messaging about what ESG factors matter to your company. What ESG factors impact your employees, stakeholders, and your bottom line? Start by communicating about them.”