June 13, 2007
As environmental, social and governance issues are increasingly being factored into their mainstream agenda, European institutional investors are taking their roles as responsible owners much more seriously. Companies will be taken to task if they step out of the ESG line, but it is unlikely that a wave of US style class actions suits will arrive on UK and continental shores. The preferred modus operandi of European shareholders is likely to remain engagement rather than confrontation.
However, Magnus Furugård, president, GES Investment Services, a Swedish-based research firm, believes that European investors will continue to tread a less aggressive tone on their home and regional turf. “The US is a more litigious society and it is an American tradition to be outspoken and assertive. I think most UK and continental European investors are still reluctant to get involved in lawsuits and they prefer to work behind the scenes using diplomacy and engagement.”
By Lynn Strongin Dodds