Which of the following is NOT among the main barriers to effective engagement?

The correct response highlights that “Unwillingness to act without specific client instruction” is not among the primary barriers to effective engagement.

Effective engagement in the context of sustainable investing entails active participation with companies or stakeholders to drive improvements related to environmental, social, and governance (ESG) factors. When considering the dynamics of institutional investors or asset managers, it is essential to recognize that they often operate under different mandates and guidelines. While they may need to ensure they are acting in the best interest of their clients, this factor does not typically inhibit the ability to engage effectively. It reflects a procedural formality rather than a barrier, as investors can initiate dialogue and advocate for changes even without direct client instructions, provided they are aligned with the overarching investment strategy and ethos.

In contrast, limited resources can hinder engagement efforts because organizations may lack sufficient personnel or budget to dedicate to outreach and dialogue. The difficulty of reaching consensus is a significant challenge when multiple stakeholders are involved, particularly when interests and objectives differ among a group. Finally, conflicts of interest can complicate engagement processes, as they may lead to biased positions or inhibit candid discussions.

Understanding these distinctions is crucial for comprehending the operational challenges that investors face when considering ESG engagement strategies. Engaging effectively requires not