Fragmented stewardship approaches and misalignment between asset owners and managers are creating inconsistencies in engagement and voting strategies, according to a report by Pensions for Purpose, a collaboration of impact investors, pension funds and social enterprises.
Titled Systemic Stewardship – Challenges & Strategies for Change, the report sponsored by asset manager Robeco developed in partnership with Border to Coast, IGG and TPT Investment Management, highlighted key challenges asset owners face in ensuring effective stewardship. Based on 21 interviews with UK asset owners, trustees and investment consultants, the research outlineed both barriers and opportunities for improving stewardship strategies.
One finding of the report is the inconsistency in stewardship approaches, with variations in voting, engagement and accountability. Smaller funds are particularly affected, as resource constraints make it challenging to implement structured stewardship programmes effectively.
Another issue is ensuring asset managers adhere to asset owner priorities. According to the report, some investors experience discrepancies between their intended stewardship objectives and the actual voting and engagement strategies executed by managers. This has led some asset owners to conduct voting internally or use third-party services to align with their long-term investment principles.
To address these issues, the report called for stronger governance and accountability. Asset owners are encouraged to align stewardship strategies with systemic risks, implement structured oversight and establish clearer communication with managers to ensure long-term impact.
Collaboration was also highlighted as a solution for overcoming resource constraints and amplifying investor influence on issues such as climate change, biodiversity and social governance concerns. By engaging in industry-wide initiatives, asset owners can pool expertise and resources to drive meaningful change, according to the researchers.
The report also noted positive developments in stewardship. More asset owners are asserting control over stewardship priorities, directing asset managers and refining engagement strategies to achieve real-world impact. Industry-wide collaborations are proving to be effective in tackling systemic risks, while investors combine direct company engagement with broader policy advocacy to drive meaningful outcomes.
Richard Giles, senior director and community lead, commented: “The report highlights the importance of systemic stewardship in managing long-term risks. Asset owners must take a proactive approach by strengthening governance, ensuring alignment with asset managers and engaging collaboratively at an industry level.”
Peter van der Werf, head of active ownership at Robeco, added: “Sustainability investing sits at the core of Robeco’s investment beliefs. With growing sustainability risks from climate and biodiversity for pension funds in a complex geopolitical environment, we encourage asset owners to enhance their stewardship efforts. Aligning accountability and consistency in engagement and voting by their asset managers will help to deliver this commitment to their beneficiaries.”
