Introduction

This guide examines how investor collaborations can address systemic ESG risks including climate change, nature loss, modern slavery, social inequality and governance failures. It argues such risks are financially material and relevant to fiduciary duties. As individual investors cannot address these issues alone, collective action is presented as essential to influence corporate conduct and public policy.

What are investor collaborations?

The guide defines collaborations broadly, from joint statements to multi-year company engagements and policy advocacy. Models include coordinated company engagement (for example, Climate Action 100+), investor statements, policy advocacy, engagement with ESG data providers, coordinated voting at AGMs, and issue-based initiatives such as tobacco exclusion or modern slavery frameworks. Structures often allocate lead and supporting investors and align activity to defined objectives.

The importance of investor collaborations

Collaborations can combine influence, improve time efficiency and enhance leverage across large pools of capital. For example, over 700 Climate Action 100+ investors represent more than AUD 103 trillion in assets under management. Evidence cited from First Sentier MUFG Sustainable Investment Institute indicates 64% of companies prefer collaborative engagement, with a 33% success rate compared to 11% for unilateral efforts.

Collective action is positioned as critical in addressing interconnected systemic risks and shaping evolving sustainable finance policy. Collaborations also facilitate peer learning, shared expertise and more consistent corporate messaging, strengthening investor influence.

Barriers to effective investor collaborations

Key barriers include data limitations, legal and competition law concerns, governance complexity, political and regulatory uncertainty, resource intensity and difficulties in measuring impact.

Competition law risks have created hesitancy, requiring legal clarity and structured governance. Resource constraints can limit participation and long-term viability, particularly without sustainable funding models. Measuring impact is challenging where initiatives rely heavily on public statements without structured follow-through, potentially reducing accountability.

How to have successful investor collaborations

The guide proposes a six-step framework grounded in behavioural insights.

An investor-led approach is prioritised, with NGOs and technical partners in support roles to preserve credibility. Early alignment on purpose and goals is emphasised to prevent scope creep, supported by written charters and commitment statements aligned with frameworks such as the Paris Agreement and SDGs.

Clear governance structures, defined decision-making processes and legal review are recommended to manage accountability and regulatory risk. Timelines, allocated responsibilities and milestone tracking help maintain momentum.

Trust-building through structured and informal engagement strengthens participation. Adequate resourcing, including pooled funding models and institutional commitments, is identified as essential for sustainability.

Case Studies

Case studies illustrate varied collaboration models. Climate Action 100+ engages 167 high-emitting companies to advance net-zero commitments and disclosure. Investors Against Slavery and Trafficking APAC (AUD 12 trillion AUM) combines advocacy, company engagement and data initiatives. Tobacco Free Portfolios has secured over 200 financial institutions’ policy shifts. Votes Against Slavery promotes AGM voting on human rights. Mining-focused initiatives address tailings safety and sector-wide sustainability.

These examples demonstrate how structured governance, investor leadership and clear objectives can drive measurable corporate and policy outcomes.

Conclusion

The guide concludes that investor collaborations are increasingly central to managing systemic ESG risks. Effective initiatives require investor leadership, clear governance, defined goals, transparency, adequate resourcing and adaptive structures. While legal, political and operational challenges persist, disciplined design and accountability mechanisms can strengthen impact and support long-term market integrity.