The Long Game

ESG Investor

Approaching his 20th anniversary in responsible investing, Rathbones Stewardship Director Matt Crossman reflects on the evolution of stewardship and highlights the power of collective action.

“Responsible investing can mean so much more than voting, but it can’t ever be less than that,” Matt Crossman, Stewardship Director at Rathbones Group, told ESG Investor as part of a conversation during which he reflected over his career. “The core responsibility of a sustainable investor is to use their rights and influence in the companies they own.”

And as a 20-year veteran in responsible investing, Crossman certainly has borne witness to just how far investor engagement can come.

“Stewardship is far more embedded and widespread as a concept,” he said. “Today, no one would argue that investors shouldn’t be conducting stewardship activities.”

A nascent sector

When Crossman joined Rathbones Greenbank Investments – Rathbones’ in-house boutique for ESG investments – as an ethical researcher in 2004, sustainability data wasn’t readily obtainable.

“Greenbank ran its own screening database and my job was to look after it, for example trawling through news sources, aggregating data, and uncovering granular insights on the UK’s largest companies and a few international firms,” he said. “It gave me a grounding in how companies work and their approach to sustainability.”

At that time, the Greenbank team wrote to FTSE companies every year to encourage voluntary disclosures. Crossman was involved in the letter-writing campaign, but recalled it “became obvious that we had influence back the other way”.

After taking on an engagement manager role in 2006, he became much more aware of Greenbank’s main clients, which were large charities, religious faith groups and celebrities. “Clearly, they wanted financial products more aligned with their values,” he said. “Having the long-term best interest of your underlying beneficiaries at heart is the basis of stewardship.”

The first annual general meeting (AGM) Crossman attended was Shell’s that same year, where Rathbones co-filed a resolution asking the oil and gas giant to do a better job on ESG risk management. “There wasn’t the big institutional buy-in [seen today], so we used the minutiae of UK company law to get Greenbank’s individual investor clients to co-file resolutions,” he said.

The engagement initiative had quite an effect, sparking off a debate in the UK around shareholder voice.

“We realised that not only do we have the financial stuff to think about, but also stewardship influence and voting rights,” Crossman added.

The full article is available here. This article was published at ESG Investor.