The world today faces many environmental and social systemic threats. Asset managers have a key responsibility to reduce these risks and mitigate their impacts, and one of the ways they do this is by engaging with their portfolio companies. But disclosure on the efficacy of that engagement is limited and there is much more asset managers can do to strengthen their engagement by applying the weight of consequence through escalation.

In this paper, we introduce the concept of a standardised escalation framework, to facilitate the application of escalation tools with companies through corporate debt and listed equity. The escalation framework comprises the escalation toolkit, which groups different escalation tools into categories of increasing strength and the escalation pathway, which sets out how the asset manager will apply and progress through the escalation toolkit in a timely manner.