ESG in Practice: How Real RI Teams Are Evolving Their Engagement Tracking & Reporting

Today’s investors and asset owners are demanding more sophisticated approaches to tracking, measuring, and evidencing the impact of their stewardship activities.

A recent webcast, hosted by Responsible Investor, brought together leading ESG practitioners to discuss the evolution of stewardship practices. Panelists included Eugenia Jackson, Global Head of ESG at PGIM; Matt Crossman, Stewardship Director at Rathbones; Trista Chen, Head of Investment Stewardship Asia at Legal & General Investment Management; and Will Keuper at Verity.

Together, they shared insights into how firms are navigating heightened expectations for transparency and provable impact.

Running the Engagement Marathon

Matt Crossman of Rathbones framed engagement tracking as akin to marathon training.

“If you’re training for a marathon… anything might happen on the day. But what I want to see from you, if I’m sponsoring you, is that you’re getting off the sofa three or four times a week,” he explained.

This analogy underscores the need for consistent effort in engagement. While influencing corporate behavior may have uncertain outcomes, firms must demonstrate their dedication through well-documented, ongoing stewardship activities. Much like a runner’s training log, engagement tracking must show the commitment and preparation behind stewardship efforts.

Moving Past ‘Nice’

Crossman noted a shift away from what he described as the “nice” approach to engagement.

Drawing on a scene from The Simpsons, he likened engagement quality to a shopkeeper addressing misconduct by simply “asking nicely again.” This method, he argued, no longer meets the standards of modern asset owners.

“Clients are rightly saying, ‘No, we don’t want [you to be] talking shop [in] nice cozy meetings. [We want you to be] holding to account and escalating your approach,” he emphasized.

Firms are increasingly expected to move beyond cordial dialogue and employ escalation strategies to ensure accountability and meaningful progress.

Evidencing Escalation

The panelists underscored the growing importance of clear, evidence-based escalation frameworks. As Matt Crossman noted:

“The most difficult internal decisions often involve moving from dialogue to more serious steps. Having a well-documented escalation trail — through platforms like Verity offers — makes these decisions more robust.”

Escalation, however, can be more than punitive. Trista Chen of LGIM emphasized the role of campaigns with clear consequences, such as their Climate Impact Pledge, which allows for divestment if milestones are not met. Yet, she also noted divestment itself can be a tool for engagement.

“Even when divesting, we may retain holdings in other funds, continuing to drive conversations and change.”

Tailoring Reporting

The demand for tailored reporting is transforming how firms present their engagement activities. Crossman pointed out a rising preference for bespoke, portfolio-specific reports over generic summaries:

“While glossy, top-down reports remain popular, we’re seeing more demand for customized reporting that reflects portfolio-level engagement.”

This shift requires firms to collect and analyze data in ways that balance granularity with efficiency.

Will Keuper of Verity observed: “Customers want seamless access to answers — whether that’s a report, spreadsheet, or number — without relying on extracting details from multiple portfolio managers after the fact.”

Three Takeaways for Engagement Teams

1. Adopt Flexible Reporting Infrastructure
   Adopt systems that generate both standardized and bespoke reports efficiently. Tailored reporting demonstrates engagement’s relevance to specific portfolios.
2. Communicate Clearly
   Clearly outline escalation frameworks and engagement progress to stakeholders. Transparency about timeframes, challenges, and successes is critical.
3. Evidence Your Escalation
   Develop robust documentation trails to support escalation decisions. Transitioning from dialogue to action requires clear evidence of attempts to remediate issues.

Conclusion

As Trista Chen noted, “Asset owners are catching up fast in understanding what investment stewardship means.” The evolution of engagement tracking reflects the maturation of responsible investing, marked by heightened demands for evidence, action, and transparency.

To meet these expectations, engagement teams must balance consistent effort with meaningful outcomes. Sophisticated tracking tools, clear escalation strategies, and tailored communication will be essential for driving progress and demonstrating impact.

Start Making Headway With Your ESG Investment Process

Verity offers an ESG engagement tracker that helps funds capture data, track the full engagement lifecycle, and streamline compliance and reporting. All in one integrated and configurable software platform.

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