Active Ownership, Explained: What Shareholder Engagement Really Means
Most people think ethical investing is about what you refuse to own. You screen out the coal miners, the weapons makers and the gambling stocks, and you buy the clean companies instead. That is half the picture. The other half is what you do with the shares you decide to keep, and it is where a lot of the real influence lives.
TL;DR
Active ownership means using your rights as a shareholder, through voting, dialogue and resolutions, to push companies to improve, rather than only picking or avoiding them.
It works through three tools: proxy voting at AGMs, direct engagement with company boards, and formal shareholder resolutions.
Active ownership and divestment answer different questions. One keeps a seat at the table, the other gives it up.
Most Australians are already active owners through their super, whether they know it or not, because their fund votes on their behalf.
UNLESS Financial has deep roots here. Co-founder Justin Medcalf co-founded the Ethical Advisers' Co-op, which runs coordinated shareholder campaigns.
What is active ownership?
Active ownership is the practice of using your rights as a shareholder, through voting, dialogue and formal resolutions, to push the companies you invest in to improve their environmental, social and governance behaviour, rather than simply selecting or avoiding them. The term is sometimes called active stewardship or shareholder engagement, and the ideas are the same. When you own a share, you own a small piece of the company, and that ownership comes with a voice.
This is the part of responsible investing that most people never hear explained in plain language. The peak bodies tend to write for institutions, and the campaign groups tend to write for activists. Justin Medcalf, co-founder of UNLESS Financial, is a Certified Responsible Investment Adviser who spent close to a decade on the board of the Responsible Investment Association Australasia. He also co-founded the Ethical Advisers' Co-op, which coordinates shareholder advocacy across member firms. Active ownership, in other words, is something UNLESS strongly advocates for.
How is active ownership different from ethical screening?
Screening, engagement and divestment are three different levers, and they answer three different questions. Screening decides what you own. Engagement decides what you do with it. Divestment decides what you sell.
Ethical screening - Answers the question “what should I own or avoid?” It looks like excluding fossil fuels, tobacco or weapons; choosing companies with strong climate records.
Active ownership - Answers the question “What should I do with what I own?” It looks like voting at AGMs, meeting company boards, filing or backing shareholder resolutions.
Divestment - Answers the question “When should I sell and walk away? It looks like selling out of a company to withdraw capital and signal disapproval.
None of these is automatically the right answer. A screen keeps your money out of harm, but it does nothing to change the company you avoided. Divestment sends a signal, though it also hands your shares to a buyer who may care far less than you do. Active ownership keeps you in the room, which is the only place a vote counts.
How does active ownership work?
Active ownership runs on three practical tools, and you already have access to all of them.
The first is proxy voting. Proxy voting is casting your vote at a company's annual general meeting without attending in person, usually by directing how your shares are voted in advance. Every listed company holds an AGM, mostly during Australia's October to November season. Shareholders vote on directors, pay and, increasingly, climate and social resolutions.
The second is engagement. Shareholder engagement is direct dialogue between investors and a company's board or management, used to press for better disclosure, emissions targets or governance before any public vote. Large funds and advisers often build these relationships over years, and much of the real influence happens quietly, well before a resolution is ever filed.
The third is the shareholder resolution. A shareholder resolution is a formal proposal put to a company's AGM by its shareholders, forcing a vote on a specific issue such as climate risk. Under the Corporations Act, a group of 100 shareholders, or members holding at least 5% of the votes, can put one forward, as the Australian Securities and Investments Commission explains. The mechanics of lodging one are more involved, but the right itself is ordinary, available to any shareholder.1.
What can shareholder engagement actually achieve?
Engagement works best as patient pressure, and we will be honest, it does not always win. Companies have shifted climate targets, improved pay transparency and strengthened board oversight after sustained investor campaigns. The Australasian Centre for Corporate Responsibility has spent years filing climate resolutions at major ASX companies. But even resolutions that “lose” can move a board, because a large protest vote is a warning management cannot ignore. That is why credible active owners set clear expectations, track progress, and keep divestment as a genuine option when engagement stalls. Influence and patience work together, and neither is a guarantee.
Who does active ownership in Australia?
Australia has a well-developed ecosystem for this work, and knowing the players helps you judge where your own money sits. The Responsible Investment Association Australasia is the peak body and runs the certification many ethical advisers hold. The Australasian Centre for Corporate Responsibility, SIX Invest and Market Forces lead much of the climate-focused resolution activity. The Australian Shareholders' Association represents retail investors and helps them vote their shares. Advisers sit inside this system too. The Ethical Advisers' Co-op, pools the shareholder influence of its member firms, including UNLESS, so that individual clients can act with collective weight.
The ripple effect
The influence here runs in layers. At a personal level, active ownership changes what you ask of your own money, moving the question from what your portfolio avoids to what it actively pushes for. Your capital is already casting votes, and the real question is whether those votes reflect what you believe.
At a system level, engagement compounds. A single vote is easy to overlook. Thousands of aligned shareholders, and the funds that represent them, become a signal a board has to answer. That pressure builds quickly, because selling a share simply passes it to an owner who may care less, whereas staying invested and voting keeps the pressure on the company itself.
At the broadest level, active ownership slowly reshapes what companies are rewarded for. When capital consistently asks for lower emissions, safer workplaces and honest governance, companies come to treat those things as expected of them, rather than as optional extras. That is how ordinary savers, mostly through their super, turn patient money into a force for change, and how they can make their money and make a difference at the same time.
This article contains general information only and does not constitute personal financial advice. UNLESS Financial Pty Ltd is authorised to provide financial services. Before acting on any information in this article, consider whether it is appropriate for your personal circumstances. You should seek advice from a licensed financial adviser.
Sources and further reading
Australasian Centre for Corporate Responsibility (ACCR) | [Australian ESG resolution voting history] (https://www.accr.org.au/research/australian-esg-resolution-voting-history/) | 2025 | Data on shareholder resolution activity and super fund voting disclosure at major ASX companies
Australian Securities and Investments Commission (ASIC) | [Shareholder rights and responsibilities] (https://www.asic.gov.au/for-business-and-companies/companies/company-share-and-shareholder-rules-and-changes/shareholder-rights-and-responsibilities/) | 2025 | The legal basis for shareholder resolutions, including the 100-member and 5% thresholds
Australian Shareholders' Association | [Your proxy counts] (https://www.australianshareholders.com.au/advocacy-monitoring/your-proxy-counts/) | 2025 | Retail-investor guidance on how to vote shares and use proxies at company AGMs
Responsible Investment Association Australasia (RIAA) | [Responsible investment standards and certification] (https://www.responsibleinvestment.org/) | 2025 | Peak body for responsible investment in Australia and New Zealand, and the source of adviser certification
