Chains of Influence: Impactive Tech interviewed in global engagement research report
- maiscallan
- Mar 31
- 3 min read
The recently published Chains of Influence: Global Differences in ESG Shareholder Engagement and How Active Owners Can Leverage Them by Marti, Chuah, and Gond offers a groundbreaking analysis of the global landscape of environmental, social, and governance (ESG) shareholder engagement. Commissioned by the Laudes Foundation and based on 93 interviews across 12 countries, the report sheds light on how power dynamics between asset owners, asset managers, and companies shape engagement practices.
We're proud to share that Impactive Tech was the only stewardship management technology provider interviewed for this study—a testament to our leadership in facilitating ESG engagement. Below, we summarise the report’s key findings and their implications for active ownership.
Understanding Chains of Influence
The report introduces the concept of "chains of influence," which describes the power relations among three key actors in ESG shareholder engagement:
Asset Owners: Pension funds, insurance companies, sovereign wealth funds, and other entities holding significant capital pools.
Asset Managers: Professional firms managing investments on behalf of asset owners.
Companies: The entities being influenced to adopt sustainable ESG practices.
The authors identify two distinct types of chains of influence:
Company-Centric Chains: Found in countries like Brazil, China, India, and South Africa, where asset owners exert limited pressure on asset managers and companies, and companies are less dependent on institutional investors.
Owner-Centric Chains: Observed in nations such as Australia, France, Japan, the Netherlands, Singapore, Switzerland, the UK, and the US. Here, asset owners have greater leverage over asset managers and companies, which are more reliant on institutional investors.
This classification provides a framework for understanding how local contexts influence ESG shareholder engagement strategies.
The Five-Step Engagement Process
Across both chains of influence, active owners navigate a five-step process to drive ESG outcomes:
Structuring Engagement Capabilities: Building internal expertise or collaborating with external partners to execute engagements effectively.
Setting Engagement Goals: Defining clear objectives aligned with ESG priorities.
Interacting with Companies: Using private (e.g., meetings or letters) or public (e.g., shareholder resolutions) channels to communicate concerns.
Pressuring Companies: Applying leverage through voting rights or collective action to encourage alignment with ESG standards.
Reporting on Engagements: Sharing outcomes transparently to maintain accountability and inform stakeholders.
The report highlights how these steps differ between company-centric and owner-centric contexts. For instance, in owner-centric countries like Japan or Australia, asset owners often retain voting control or establish dedicated ESG teams to lead engagements directly.
Opportunities for Active Owners
The study identifies five strategic opportunities for active owners to enhance their impact globally:
Importing pressure from owner-centric regions to company-centric markets where ESG standards lag behind.
Funding systemic change initiatives in company-centric countries to address structural barriers to sustainability.
Leveraging the expertise of seasoned asset managers from owner-centric contexts to guide engagements elsewhere.
Utilising access provided by local asset managers in company-centric regions to build relationships with companies.
Mobilising companies in owner-centric countries as champions for global sustainability standards.
These opportunities underscore the importance of tailoring strategies to local conditions while fostering cross-border collaboration.
Our Role as a Stewardship Technology Provider
As the only stewardship technology provider interviewed for this report, we are proud to contribute to advancing ESG shareholder engagement globally. Our platform empowers active owners by streamlining the five-step engagement process—from setting goals to reporting outcomes—while enabling data-driven decision-making tailored to diverse chains of influence.
Our inclusion in this landmark study validates our commitment to innovation and our role in shaping the future of sustainable investing.
Conclusion
The Chains of Influence report provides invaluable insights into how power dynamics shape ESG shareholder engagement across different contexts. By understanding these dynamics and leveraging emerging opportunities, active owners can drive meaningful change on a global scale.
As a leading stewardship technology provider featured in this study, we remain committed to equipping investors with the tools they need to navigate complex chains of influence and achieve their ESG objectives effectively.
For more information about how our solutions can support your stewardship efforts, contact us today.
