Frequently Asked Questions
Is securities lending compatible with ESG investing?
ESG. Investors expect it. Regulators demand it. It’s become the most important conversation in capital markets and securities lending. How firms respond will shape their investment decisions for decades to come.
So, is it possible to run a sustainable investment strategy and also engage in securities lending?
Yes. ESG isn’t a feature. It’s an approach to managing investments which is equally applicable to securities lending.
At Sharegain we’ve designed our technology from the ground up to meet the needs of ESG-minded investors and ensure they’re fulfilling their ESG requirements, without incurring any new overheads.
There are three areas that investors need to consider as they look to begin an ESG-compatible securities lending programme:
The crux of every ESG conversation is control: you must have the ability to shape the future of the firm’s your invested in, with a view to creating long-term value.
Through Sharegain, you can choose how your securities are lent and in what volume. If you have securities you choose not to lend, that’s your decision to make. Active ownership doesn’t end once a security is out on loan: with Sharegain, you can terminate a loan at any time and have your securities returned within a few days.
Retaining your voting rights
Lending securities involves signing over voting rights for those securities, limiting an owner’s ability to participate in key corporate events.
Through your Sharegain dashboard, you can recall your securities from anywhere in the world, returning the assets and their voting rights to you. This allows you to fulfil your corporate governance obligations with just a few clicks.
Every lending transaction should be collateralised at a minimum, but how that collateral is managed can have major ESG implications on the securities lending process.
Sharegain uses a third-party collateral management model, meaning the collateral for your transaction is held and managed by a top-tier custodian for the lifetime of the loan. We also allow our clients to build a bespoke collateral schedule, so they can set their own criteria for the collateral they will receive before entering into the loan.