Investment Managers, Pension Funds Form Initiative to Embed Stewardship into Investment Process
A group of investment managers and pension funds, in a joint initiative between UK-based organizations the Investment Association (IA) and the Pensions and Lifetime Savings Association (PLSA), announced the launch of a new steering group to examine how stewardship and a focus on long-term investment can be better integrated into the investment process to create sustainable value for savers and investors.
The steering group will be co-chaired by PLSA Chair Richard Butcher and Archie Struthers, Global Head of Investment Governance and Oversight at Standard Life Aberdeen, and members also including senior executives from NEST, Border to Coast Pension Partnership, Willis Towers Watson, Sackers, BlackRock, and State Street Global Advisors.
“Asset managers must meet, and evidence how we are meeting, the increasing expectations of savers to manage their money in a responsible way. In short, our mandate to operate is dependent on us demonstrating our commitment to responsible stewardship. Our industry is best served if we collaborate closely with asset owners – and their appointed representatives – to manage savers’ assets on the basis of a common understanding, using definitions of success that better reflect society’s expectations. I am excited and feel privileged to be working with this august group of stakeholder representatives on behalf of the IA. Together we can better align and strengthen the common purpose we all share to invest for a more sustainable future.”
According to the steering group, the initiative will explore a range of stewardship issues aimed at strengthening the relationship between asset owners and investment managers, including:
- The proactive steps investment managers can take to understand and deliver their clients’ stewardship priorities.
- The role investment managers’ disclosures play in the information flow between investment managers and asset owners in their approach to stewardship, including how these disclosures demonstrate that the stewardship and investment approaches have been aligned with the clients’ wishes.
- The role of asset owners in ensuring stewardship plays a key role in their approach to manager selection and ongoing performance and oversight assessment.
- The role the contractual relationship and non-contractual arrangements can play in embedding a long-term focus and clear stewardship expectations, including a consideration of model mandates.
Sarah Woodfield, Stewardship Manager at the IA, said:
“Investment managers have an important role to play in generating long-term returns for millions of UK pensioners. By working together with pension schemes, we can further embed stewardship within the investment process to ensure our members are delivering long-term sustainable value, that not only meets schemes’ financial objectives, but will also deliver on their environmental, social and governance aims.”