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4 Stages of Engagement Tracking: From Novice to Expert

In this blog, we map the maturity of engagement strategies to common system capabilities across four different levels. We suggest using it as a resource to assess your own setup and to what degree it helps you meet and exceed expectations, now and in the future.

Institutional investors are increasingly held to account for the responsible stewardship of clients’ and beneficiaries’ investments. Depending on the cultural, geographical, and organisational context, stewardship approaches will look differently, or should we say, reflect different maturity levels. This doesn’t make it static, as we all know it’s a journey, for which accountability and ambition go hand in hand.


The engagement management maturity model shown below is designed as a roadmap to help investors plan for their future state and improved “operational alpha”. Accounting for the maturity of engagement processes (i.e. how structured and formalised these are) and common system capabilities we hear about in the market, whether or not you identify with any of the general stages, it hopefully provides some relevant guidance and food for thought.

* For extra context on engagement strategies and a typology of engagers, see the thematic research study Engagement: Unlocking the black box of value creation


The Novice: A starting point

Here is where most organizations start their stewardship journeys:

  • Often, there’s no or very limited information on strategy,

  • team efforts are primarily driven by the investment department, possibly with RI coordinator support,

  • the engagement process primarily reflects fact-finding dialogues as part of general investee monitoring, sometimes triggered by controversies, with limited objectives and target-setting, and weak escalation,

  • with no to limited reporting.

At this level, aside from evaluating the strategy based on team, stakeholder requirements, and competitive positioning, investors need to think wisely about resources and how they ensure data capture with minimal administrative burden while staying cost-efficient. From a system support perspective, if the investor is small enough with a limited number of engagements and activities, excel might fully suffice, and there might not be a need for something more advanced. However, if your organisation struggles with e.g. complex spreadsheets, version control, and siloed data, then it's time to take action. For more information, read our blog on Excel for Engagement Management: When it's Time to Break Up.


Emerging Maturity: Finding ways ahead

To be plotted as emerging on the maturity model, your organisation’s approach will likely mirror some of the following criteria:

  • there’s dedicated information in a Responsible Investment policy,

  • a smaller ESG team is in place responsible for strategy and coordination with the investment dept.,

  • the engagement process is characterised by both reactive and proactive dialogues, there’s an overlay of engagement objectives to regular meetings, escalation is still weak with no to limited impact on investment decision-making, and

  • reporting is primarily narrative-based.

At this stage, there’s an increased focus and attention to stewardship. Driven by market developments, the demonstration of efforts is becoming increasingly important, making solid tracking more urgent.


From a system support perspective, investors recognise they need at least baseline functionality to align with peers. With engagement tracking becoming a separate line item on the requirement specification, there is a mandate to thoroughly evaluate current and future capabilities. To ensure quality and complete data trails, investors focus on process buy-in across the organisation, which however can still prove challenging.


Serious effort: Positioning for scale

These investors have a solid engagement history to build from:

  • the stewardship strategy is outlined in a standalone section of the RI policy,

  • a clear mandate and governance structure is in place, with an ESG team responsible for driving their own dialogues, as well as supporting the investment department with subject matter expertise,

  • engagement process-wise, there’s a thoughtful approach to prioritization, monitoring, and escalation, with more focus on thematic engagements, and

  • reporting displays a mix of narrative-based disclosures supported by limited quantitative information.

At this stage, stewardship is becoming a competitive advantage in product- and brand positioning, following with greater expectations both internally and externally. Investors need a thoughtful approach to scaling their stewardship programs and resources, both in terms of personnel, process, and technology.


From a system support perspective, the biggest challenges are oversight, control, and scaling. Legacy approaches are increasingly falling short of expectations, followed by more customisation needs. There’s an increased focus on database management, integrations, and fit-for-purpose functionality such as the ability to set objectives and deadlines, track thematic engagements, with powerful analytics and reporting capabilities.


Expert practices: Fully integrated

Typically, advanced organisations see their stewardship strategy as a differentiator, part of a firm-wide progressive responsible investing agenda:

  • There are dedicated policies for stewardship, covering both engagement and voting,

  • a stewardship team is responsible for the organisation’s strategy and practices, including driving their own dialogues, as well as supporting the investment dept. with subject matter expertise,

  • the engagement process is well-defined, covering prioritization, monitoring, and product-specific escalation, with a focus on systemic issues and the broader sphere of influence, and

  • reporting reflects both narrative-based and quantitative disclosures, supported by in-depth case studies.

At this stage, your organisation is allocating resources across the board. While having a solid process on paper, maintaining quality and improving overall coordination is still important.


From a system support perspective, The biggest challenges are often organisational in terms of competing internal priorities, and operationalising workflows. To align the strategy with industry best practices, purpose-built solutions in combination with system integrations are preferred to fulfill use cases. As part of your analysis of whether to build or buy, please read our blog on Esgaia vs In-house Development: A Time and Cost Analysis.


Empower your team

Purpose-built engagement tracking technology is playing an increasingly important role for investors. It helps improve quality and empower smooth workflows so that your teams can focus their time and effort on what matters.


To offer some self-help, your organisation should be asking itself questions such as:

  • Have we set aside a budget for this?

  • What functionality needs and requirements do we have?

  • How do we ensure to keep up with emerging industry best practices?

  • What tools can help us take the next step, or augment existing capabilities?

Today, digital is a top priority for asset managers to future-proof data and process management. Engagement tracking is one area in which investors can position themselves for both improved engagement effectiveness, as well as operational alpha.


Are you ready to take the next steps in engagement management? Contact Esgaia to discuss how we can help you overcome challenges and address inefficiencies.


//The Esgaia team




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