“SfC is still growing despite the severe crisis hitting sustainable finance”
Julius van Sambeck, managing director at SfC member Ethius Invest (Switzerland), is the new member of SfC’s Board.
Three questions to Julius van Sambeck
Shareholder engagement has become a common practice for investment management companies. However, in many cases it is just ‘a pat on the back’ of companies. How can engagement become more impactful today?
One of the many reasons why engagement initiatives are currently not as successful is that most asset managers focus on engaging with investee companies rather than taking a multi-stakeholder approach. As an organisation, Shareholders for Change (SfC) has focused on this type of engagement and will continue to expand its resources in this way. This includes engagement with (ESG) rating agencies and consideration of leading research from academic institutions and specialists, particularly in relation to orphan engagement issues.
In addition, looking at controversies from an evolving risk management perspective could help improve the outcomes of engagement initiatives. For example, the CSDDD (Corporate Sustainability Due Diligence Directive) or CSRD (Corporate Sustainability Reporting Directive) are important pillars in translating negative social and environmental externalities into actual long-term bottom line risks for the investee.
The German Supply Chain Act was welcomed with great expectations one year ago. However, it has started showing its limits. What is good in this new regulation and what should be improved in your opinion?
The German Supply Chain Act (LkSG) is so far an almost perfect example of how laws without enforceability do not work the way they are intended to work. In the example of the law, the missing links are several. For example, the inability to bring actual civil claims by human victims in the supply chain. As well as the missing legal representation of Mother Nature or animals as a legal person. This prevent to enforce the law beyond the second level of the supply chain. I am hopeful that the EU CSDDD will be translated differently into national law by member states. And that we will soon have real enforceability of these well-intentioned laws.
Shareholders for Change is constantly growing as a network. What could it do better in the next three years?
SfC has been a success story since its inception. Even at a time when sustainable finance has experienced a severe crisis, it is still growing. We have used this time to review our governance and are in the process of implementing innovative ways to scale the network without compromising the quality of our growing membership base. However, we must acknowledge that as a pan-European network we are still not represented in several key EU Member States. Changing this is one of our priorities!
In addition, and although we have done much in this area, we must continue to work to support shareholder democracy in the form of physical annual general meetings. We would therefore like to encourage all our members to be more present at the AGMs of their investee companies. It is very important to stress the importance of attending these physical gatherings of investors.