Share Action

New ShareAction responsible investment guidance on effective escalation

(11th December) Today ShareAction, the responsible investment charity, is launching its second guidance paper in its Responsible Investment Standards and Expectations (RISE) series aiming to bring clarity and ambition to responsible investment. The latest paper addresses the critical issue of asset managers failing to engage robustly with the companies that they invest in.

Asset managers often talk about the quality of their engagement with companies - sometimes to justify a weak voting record or the absence of robust investment policies. However quality engagement should include a robust use of escalation, and at the moment it’s very difficult to see how, and to what extent, asset managers are escalating with their investee companies. A ShareAction review of stewardship and sustainability reports of 50 of the world's largest asset managers reveals limited disclosure on the use and outcomes of escalation.

Despite asset managers generally disclosing some elements of escalation, for example their voting activity, what this reporting fails to do is fully capture the breadth, depth and quality of engagement.

ShareAction is therefore proposing a standardised framework for escalation which will allow:

  • Clients and other stakeholders to assess and compare how asset managers are using escalation tools;
  • Companies to understand how their strategic choices will affect their relationship with investors and how it might impact access to capital;
  • Investors and other stakeholders to identify overlapping goals and common purposes;
  • Other asset managers to be spurred to a more ambitious, consistent use of escalation tools to guide companies onto a path that benefits people and planet.

The escalation policy paper additionally calls for asset managers to ensure they resource their escalation capacity appropriately, concluding that escalation policies are only as good as the systems that underpin them.

Commenting on the release of ShareAction’s escalation policy paper Niall Considine, Head of Investor Standards, said:

“Its importance is well recognised, for instance by the Financial Reporting Council in their Stewardship Code. Unfortunately, the use of escalation is inconsistent and often ineffective. Further, disclosure of escalation is poor and therefore stakeholders cannot assess and compare how effectively asset managers are using this vital tool.

“Our paper lays out a standardised framework for a more ambitious and consistent use of escalation tools, supported by improved reporting. We urge asset managers to adopt this framework so that escalation is more transparent and delivers better results.”

Notes to Editors

The RISE escalation paper can be found here:

For the purpose of this report, ShareAction reviewed the stewardship and sustainability documents of 50 of the largest applicable global asset managers. We found that although 40 mentioned escalation in these reports, they provided limited detail on its application and outcomes:

  • 3 made reference to any time-bound milestones in their expectations for investee companies;
  • 8 talked about the anticipated pace of escalation; and
  • 7 included reporting on both failed and successful escalation outcomes.

ShareAction launched a new definition of responsible investment earlier this year as part of it’s ongoing work on Responsible Investment Standards and Expectations (RISE). Central to the approach has been creating a clear framework setting out the benchmark for what responsible investment should mean to all asset managers:

“Responsible investment is a transparent approach, embedded throughout the investment process, that takes the negative positive impacts on people and planet as seriously as financial risk and return.”

You can find out more about ShareAction’s RISE programme here:;

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