Driving Change: When ESG Investors Act Like the Majority

Sonya Dreizler, a subject matter expert on ESG and Responsible Investing, speaks with Gabe Rissman, Co-Founder & President of YourStake.org  as part of this ESG University series that explores the Data Behind ESG.  

In this segment Sonya and Gabe discuss the power of shareholders and investors banding together to bring ESG to the forefront resulting in economy-wide positive impact.  

 

Sonya Dreizler

What is the most meaningful part of ESG and sustainable investing to you personally?

 

Gabe Rissman

I was brought into this work by my co-founder, Patrick.  I was recruited to join the fossil fuel divestment movement at Yale University and we ended up co-leading the fossil fuel divestment movement realizing the power that finance has to create positive change in the world.  This was in 2012 when it (the movement) was pretty nascent.  I think that the fossil fuel divestment movement has really increased the profile, and accelerated the adoption of ESG.

In addition to working on fossil fuel divestment, Patrick and I realized the power of sustainable investing in general. So we dove in, we were students so we had to do an academic literature review of the best ways to create impact and we had to analyze the field and realize what the challenges were and what was missing. We were also able to manage about $100,000 of the school's endowment, as part of our student run investment fund and explored shareholder engagement and proxy voting as well. As a student, I co-filed the shareholder resolution with Exxon on their climate lobbying and went to Texas and presented this resolution in front of Rex Tillerson who was the CEO at the time.

All of that exploration led us to start building the YourStake database, building this repertoire and understanding of what the challenges were, what was missing and what's needed to create impact. There were two primary things (that we discovered). The first is trust in ESG. That's what we really like to cover and hammer home is this data is really crucial to be able to provide transparent information on helping people, align their values with their investments or align their investments with their values.  Providing this data allows for actionable opportunities for people to invest more in what they believe in, and we're now actually seeing examples that didn't even exist last year of shareholder pressure and ESG investors acting like the majority instead of the minority and companies listening.

The Deliveroo IPO is a great example where it tanked because they couldn't get institutional investors on board due to issues with worker treatment. So part one is just providing this data and making it transparent allows people to take action.

Part two is realizing how important shareholder engagement is, and again when ESG was the minority, it had a huge record of success. Now that ESG is becoming more prominent there's so much power for shareholders and investors to band together and essentially encourage companies and push them to change their practices and policies in a positive direction at the level of the whole economy.  Investors are not just focused on a single company but they can address issues at scale.

YourStake is very focused on this issue because we think it's such a great way of creating change. We always provide stories and highlights of shareholder engagement help people find the funds and fund managers that are doing the best work on shareholder engagement and see that becoming increasingly part of what we do and just what ESG and sustainable investing means going forward.

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