En|ga|ge|ment – bonne lecture

 

I am one of many Austrians faced with a recurrent nightmare: I am standing in front of the A-levels panel,

ready to take my French exam, and I am lost for words. All that drudgery for nothing, and the A-levels: perdus.

No, I did not like the French language, and it did not like me back.

 

So it is actually quite surprising that I am keen on the idea of engagement. After all, the word engagement is

derived from the French “engager”, which has three meanings: to pawn something, to ask somebody to do

something, and to bind oneself through a promise. In the field of sustainable investment, it stands for a dialogue

with companies that should guide them towards a more sustainable form of business operations. The original

meanings of the word engager are an accordingly good fit.

 

To pawn an object means to lend something. That’s exactly what is happening in the engagement process,

without many people being aware of it: Investors lend the power to control billions of euros and to animate

companies to follow a more sustainable business regime to asset managers.

 

Ultimately, engagement consists of the request directed at companies to instigate change (we are, after all,

polite people). In an engagement dialogue we ask companies to align their operations more strongly with

environmental, social, and governance factors. And while we are polite, the idea is to ensure the companies

we are in dialogue will follow our assessment and change their ways.

 

This takes us to the last point. Successful engagement does not only mean talking, but leads to specific

improvements that a company commits to. These commitments are developed as part of the engagement

process together with the respective company, and Erste Asset Management follows up on whether or not

improvements are being made. To this extent engagement is a concrete instrument whose effectiveness can

easily be monitored and measured.

 

Luckily I did finish my A-levels, which proves that I passed French. This edition of ERSTE RESPONSIBLE RETURN –

The ESG-Letter should prove that we know how to handle the trust of our investors and how to translate it

into concrete engagement. Bonne lecture.

 

Sincerely

​

Mag. Gerold Permoser