In addition, interaction with regulators is an essential part of understanding the corporate and policy environment. This in turn is one of the factors behind making responsible investment decisions, as Helena Vines Fiestas, Deputy Global Head of Sustainability at BNP Paribas Asset Management, explains in this video on stewardship in asset management.
Stewardship involves looking after investments diligently and responsibly, just as a good “housekeeper” would. This means, for example, assessing whether companies themselves are governed appropriately, but also how companies are handling their social and environmental responsibilities.
Bringing about a more sustainable financial system
BNP Paribas Asset Management believes stewardship and engagement are fundamental in engineering the shift towards a more sustainable financial system. By that we mean an approach to investing where investors are focused on the creation of long-term value and the environmental, social and governance (ESG) aspects of investing responsibly.
An active steward takes part in the voting at annual shareholder meetings, but also talks to companies extensively to get the best understanding of the issuer of equity, bonds or other investment assets, be it a company, a local, regional or national government, or another body.
Seeking change and progress as an asset owner
Dialogue also involves approaching those who make the policies that shape markets. Both at an issuer and at a policymaker level, BNP Paribas Asset Management believes in being an active and diligent player. At the same time, good stewardship can mean working alongside industry peers, particularly when engaging with policymakers.
“This helps us understand the companies we invest in and the regulators that shape the markets we invest in, so that we can make better investment decisions,” Helena Vines Fiestas says. “It also helps companies and policymakers understand our standards and our efforts to move towards a low-carbon world offering long-term sustainable investment returns.”
For more articles by Helena Viñes Fiestas, Deputy Global Head of Sustainability at BNP Paribas Asset Management and a member of the European Commission’s Technical Expert Group on Sustainable Finance, click here >
For more articles on sustainable investing, click here >
Also read BNPP AM details engagement with issuers, regulators and public policymakers
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Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients.