Responsible investment research and campaigning NGO ShareAction announced today the publication of new a new Leading Practice Guide, containing its research outlining the current state of real-life leading practice by asset managers on core ESG topics, including highlighting those with leading practices in various ESG areas.

According to ShareAction, the new research is aimed at enabling asset owners to better assess the performance and practices of asset managers on key sustainability topics, and to guide their engagements with asset managers. The guide includes a series of suggested ‘next steps’ for the sector, such as voting policies that commit to supporting all independent ESG resolutions on a ‘comply or explain’ basis.

Colin Baines, Investment Engagement Manager at Friends Provident Foundation, said:

“We welcome the publication of this leading practice guide, which will enable asset owners to better hold managers to account by demonstrating that positive changes are not just possible but have already been implemented by their peers. The guide reinforces the key messages in our own sector assessment, especially around stewardship and voting and the need for stronger commitments across both. We encourage asset owners to use the checklist to set strong expectations for their asset managers on authentic responsible investment.”

In its research, ShareAction focuses on four key areas of assets managers’ ESG practices, including Responsible investment governance, Climate change, Human and labour rights, and Biodiversity, providing checklists of current leading practices in each area that asset owners can compare with their managers’ practices.

The NGO also highlights proxy voting practices as a key test of investors’ commitment to environmental and social goals. In the report, ShareAction states:

“Proxy voting policies form the backbone of an effective stewardship approach: They dictate voting outcomes as well as communicate an investors’ expectations and red lines for investee companies. Voting policies should therefore provide clear and comprehensive breakdowns of voting approaches across ESG topics, whether in favour of shareholder proposals or against traditional governance resolutions.”

ShareAction highlighted several asset managers that were most frequently positively cited throughout the leading practice guide, including BNP Paribas Asset Management, NN Investment Partners, AXA Investment Managers, Robeco, and Legal & General Investment Management. The organization noted, however, that no single asset manager came close to implementing leading practices across all four topics. 

Isobel Mitchell, co-author of the report, said:

“Current leading practice is still a world away from what is needed of the sector to meet the challenges presented by the systemic risks considered in this report.”

Commenting on the publication of the report, Luba Nikulina, Global Head of Research at Willis Towers Watson, said:

“As a key link between asset managers and their asset owner clients, we welcome this leading practice guide that not only evidences what good looks like on responsible investment by asset managers, but outlines clear suggestions for where the sector needs to head next. The checklist is a helpful practical resource for not only benchmarking performance, but framing important discussions with asset managers.”

Click here to see ShareAction’s full report.