Erste Asset Management has talked to its rating agencies in order to find out whether and how engagement

is being pursued with analysed companies.

 

Our providers of sustainability research pointed out repeatedly that they did not act as engagement partner

to ensure objectivity and independence in the periodical sustainability rating of companies.

 

Still, research agencies play a role in the engagement process. Their sustainability rating tells companies how

high their ESG standards are and what areas could do with improvement. The agencies inform the analysed

companies about all the criteria of the rating and then offer an opportunity for comment. According to our

 research providers, the response rate of companies in industrialised countries equals up to 60%, with the

number of responses decreasing if no deadline has been given for the response. In emerging countries

companies tend to take up the offer of engagement less frequently, but the tendency is rising.

 

In direct talks our research providers assess the sustainability of the analysed companies without suggesting

any specific improvements (for the aforementioned reasons). Thus the task of active engagement lies with

investors and investment companies such as Erste Asset Management which with the help of engagement

partners and the invested capital exert pressure on companies. In doing so they resort to the knowledge

and industrial know-how of the research agencies and often leverage them for successful engagement activities.

 

Status:

Research providers basically alert companies to sustainability and support EAM in finding information.

However, the (often lengthy) talks geared at improving company sustainability are the task of Erste

Asset Management.

 

(Richard Boulanger)