LuxFLAG organised a breakfast seminar together with State Street on 12 December. Ana Harris (State Street Global Advisors), Janne Werning (Union Investment Germany) and François Masquelier (RTL Group) joined the discussion on engagement moderated by Mario Mantrisi (LuxFLAG). Following the introduction by David Suetens, Managing Director of State Street Bank Luxembourg, the panel highlighted that engagement and voting on sustainability matters are changing today's investment conversation. About 50 delegates attended the event.

Engagement has become an integrated part of active management processes. The active dialogue with companies is increasingly used as an investment strategy to boost ESG practices and set the right incentives to solve specific ESG concerns. A divestment decision is often based on the progress that has been made and a company's efforts to fulfill its sustainability credentials. The asset managers on the panel highlighted that if a company has no intention to progress, they will use their vote and as a last step divest. Furthermore, the panelists expressed that today ambitions are no longer enough, there must be clear targets and reporting on the progress made. The panel highlighted that standards will help to differentiate the pretenders from the active change makers. Furthermore, the rising awareness of investors on matters such as climate change helps to move sustainable development forward. Even though the majority of large companies already produce Corporate Social Responsibility reports, about 20% of the largest companies worldwide don't report at all on sustainability matters. ESG data remains therefore difficult to collect, however data sources in general and the quality of reports have made fast improvements over the past years. The panel highlighted that in the future integrated reporting, combining financial and extra-financial reporting, will play an important role to build sustainability into strategic decisions.