Real Impact Tracker Involves Everyday Investors in Creating Better Corporate Governance
- Everyday investors need to play a greater role in corporate governance.
- It’s dominated by institutions, where the least common denominator is profits
- Everyday investors should hold companies and funds accountable to their values
- Everyday investors can play a greater role in corporate governance
- The Real Impact Certified Community helps them find which fund managers hold companies accountable to their values.
- The Real Impact Button gives individual investors access, previously limited to institutions, to engage, as shareowners, with the management of their funds and companies.
- Imagine what would happen if companies really took all the considerations of their shareowners into account.
Other than throwing out the proxy statements they get once a year in the mail, most individual investors don’t participate in the governance of the companies they own. People leave key decisions about company policies and practices to their fund managers. But individual investors don’t usually consider proxy voting or other governance policies when choosing their fund managers, so the managers’ decisions do not necessarily represent the values of the actual people whose money is invested. Widespread increased public participation in corporate governance is needed to hold companies accountable to their shareholders’ social and environmental values.
Luckily, investors can now participate more in a shareholder democracy. Real Impact Tracker is helping people understand the impact of different fund managers, so people can know if their manager truly represents their values. And Real Impact Tracker is providing people access to have a say in the governance of their companies and funds through our Impact Button.
How do you assess the impact of an investment fund?
It is not an easy question to answer. Corporate ESG ratings, from firms like MSCI and Sustainalytics, have been the first attempts to help fund managers identify where there is good for investment. Now, those same firms are transforming those datasets to rate the funds themselves, to steer the public towards funds that invest in high rated companies. But those holdings-based approaches leave out the efforts of fund managers to improve corporate governance; the real impact of an individual’s investment dollars.
Unlike these holdings-based analyses, a more holistic view must probe the real impact of a mutual fund. Academic literature demonstrates the many pathways to impact in public equity investing. It is important to consider a fund’s levels of ESG investing, shareholder engagement, public awareness raising, and policy advocacy. Otherwise, impactful investor efforts, like Boston Common’s engagement with banks that led them to commit to limit financing coal plants, get missed.
Real Impact Tracker’s new Certified Real Impact Community highlights fund managers that achieve high standards of impact, providing investors insight into which managers are committed to creating social and environmental benefit with their investments. The Community exemplifies what the public can expect from funds, and creates a body that can discuss and look to each other for strategies for impact.
Our Real Impact Button
We’ve always known that investors can make a difference in company policy. In addition to choosing fund managers that better represent their values in corporate governance decisions, it is important for individuals to directly express their desires for their companies and funds to create more social and environmental good for the world. Our Impact Button facilitates shareholder access to their funds: people can directly send feedback to their funds and companies, and signal their support for existing efforts run by NGOs or shareholder advocates.
Asset managers can amplify their investors’ voices, on sustainability practices, or policy advocacy, or gender diversity, or anything else. If enough investors are engaged as shareholders, intentionally choosing and engaging with their asset managers, individuals can become advocates, shaping the financial system that governs them. We’re helping build the movement of individual investors to ensure their companies are accountable to their values.
For more information, the ratings, and the Impact button, visit our site. See also, the Real Impact Tracker webinar, announcing our new Real Impact Certification for fund managers. Learn more about our mission and goals, and hear from the newly certified Zevin Asset Management and Stewart Investors Sustainable Funds Group. Follow on Twitter @realimpacttrack
The rise of “socially responsible investment,” “impact investing,” “sustainable investing,” and all the iterations on this theme (worth $8.72 trillion) signal amplified public interest. The people want to do good.
Take Action: Have a Real Impact
- Check to see if your fund is highly rated.
- If not, tell your fund what is important to you after clicking on The Impact Button.
- Learn what they could be doing by checking out The Certified Community.
- Sign up for our Newsletter. Follow Real Impact Tracker on Twitter.
Disclaimer: Real Impact Tracker is not an investment advisor. We do not offer financial advice. The information we provide is for information purposes only. Seek a duly licensed professional for investment advice.