Introduction

This report examines the nature, structure, and outcomes of internationally coordinated investor engagements on environmental and social (E&S) issues, focusing on 31 initiatives organised by the UN-supported Principles for Responsible Investment (PRI) between 2007 and 2015. The study provides evidence on how leadership and collaboration affect engagement success, target firm performance, and investor fund flows. It also contextualises findings within the broader debate on responsible investment and fiduciary duty.

Institutional background and data

The PRI Collaboration Platform enables investors to work together on corporate engagements, providing infrastructure for coordination, information sharing, and transparency. The platform mitigates free-rider problems and coordination challenges through PRI’s role as a neutral third-party coordinator, offering expertise, governance, and data management support.
The dataset includes 31 PRI-coordinated projects across environmental, social, and governance themes, linked to the UN Global Compact and Sustainable Development Goals. Sixteen projects used a single-tier structure, while fifteen used a two-tier structure with designated lead and supporting investors.
In total, 1,654 unique engagements with 224 investors and 1,077 target firms were studied across 63 countries. The average project engaged firms from 18 different countries, highlighting the global reach of the platform. Success rates averaged 52.7%, significantly higher than the 2.8% rate for individually undertaken E&S engagements in earlier studies.

Engagement processes

Target firms were primarily large, multinational companies, often with higher market capitalisation and foreign sales exposure. The projects were concentrated in manufacturing, infrastructure, and retail sectors. Firms targeted through two-tier engagements showed stronger subsequent financial performance, suggesting that structured collaboration yields better outcomes. Engagements were typically evaluated using pre- and post-engagement scorecards that assessed improvements in disclosure, policy, and implementation practices.

Leadership and engagement structure

Leadership was a critical determinant of engagement success. Institutions with more substantial financial stakes, stronger reputations, and greater informational advantages were more likely to assume leadership roles. Two-tier structures, where lead investors coordinated efforts supported by others, alleviated coordination costs and free-rider problems. Projects led by reputable investors from countries with strong social norms achieved higher success rates.

Findings and analysis

Quantitatively, firms engaged through two-tier structures exhibited an average 4.7% increase in annual abnormal buy-and-hold stock returns (ABHRs) and a 0.9% increase in return on assets (ROA) during the engagement period. These improvements grew to 9.4% and 2.3%, respectively, in the following year, with stronger results for successful engagements.
Investors who participated in successful engagements experienced 12.5% higher fund inflows the following year, while those with leadership experience saw additional increases in subsequent years. These results suggest that leadership in E&S engagements enhances both financial and reputational value for institutional investors.

Discussion and implications

The study confirms that coordinated engagements, when structured effectively, generate measurable value for shareholders and improve corporate sustainability performance. It also supports the view that responsible investment does not entail a trade-off between sustainability and financial returns. Instead, collaborative efforts under PRI’s framework align with fiduciary duties and contribute to long-term investor and societal value.
The research highlights the strategic importance of credible leadership and cooperation mechanisms in sustainable finance. By pooling expertise and influence, investors can better achieve shared objectives, manage engagement costs, and demonstrate accountability in ESG integration.

Conclusion

This report provides the first large-scale empirical analysis of globally coordinated E&S engagements. It demonstrates that structured collaboration—particularly with defined leadership—enhances engagement effectiveness, corporate outcomes, and investor fund flows. The findings reinforce PRI’s role as an enabling organisation facilitating responsible investment practices and advancing sustainable market behaviour.