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PLSA) digital ESG Conference 2022. Trustees should exert their influence over asset managers and investee companies to ensure they are “walking the walk” in terms of adapting their business models to net zero objectives, she said, including encouraging managers to sign up to the UK StewardshipCode.
At a glance, the rising number of ESG-related shareholder proposals filed and backed by investors shows a growing appetite amongst asset owners to push systemic stewardship further and secure positive environmental and social outcomes. Transparency is improving, but slowly.
As part of investors’ stewardship practices, engagement can, if well-executed, lead to positive results across the axes of risk, return and impact. Engagement to reduce risks: In a recent study by Hoepner et al (2022) , the authors analysed whether ESG engagements result in subsequent reductions in downside risk at portfolio firms.
“There’s been a lot of grumbling from investment managers about vote reporting requests from pension funds in particular,” he said. Samantha Chew, Stewardship Lead at Aegon UK, which is unable to consider divestment of its largely passively-managed portfolio, said poor transparency and timeliness of vote reporting were two longstanding barriers (..)
The concept of assessing what effective stewardship should look like was first introduced by the FCA in 2019 in a joint effort with the Financial Reporting Council (FRC), setting the groundwork which helped define what the minimum expectations should be for financial services firms investing on behalf of clients and beneficiaries.
The NZIA has been treading carefully since similar issues were raised in Q1 2022, particularly when issuing its first non-binding target-setting protocol in January. Their action follows a letter on 15 May from state attorneys-general warning that members may be in breach of state and federal US law.
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