Through our work with the A4S Asset Owners Network, we were asked by members to provide a list of both approaches and specific questions that peers have used effectively in stewardship activity.
Split between the different stages of an asset owner – asset manager relationship, we have set out tried-and-tested examples to strengthen stewardship impact through asset manager engagement. It includes practical questions and examples to support trustees across recruitment, monitoring and voting, helping to move beyond high-level commitments and towards more detailed, outcome-focused conversations.
This short guide includes examples such as:
During recruitment: Changing a question on whether they have sustainability-related targets at the recruitment stage to ‘How are sustainability-related factors at both an entity and portfolio level evaluated, and what scenario analysis approaches do you follow?’
During monitoring:
- Setting an annual expectation from the Chair on sustainability intent, positions on high-priority sectors and expectations of the manager – using this to inform monitoring meetings.
- Asking specific questions like ‘How are your holdings in X and Y consistent with your approach to stewardship and long-term investment, considering the clear risks associated with these businesses?’
- Balancing quantitative data demands with a report on outcome-based progress, eg the percentage companies in the portfolio that are actively transitioning and how this compares to market average.
During voting: Asking one or two focused questions, eg ‘What votes have you made against the re-election of directors [in X sector] on climate or nature-related grounds?’
While written for engagement with asset managers, many of the examples can also be applied to discussions with other service providers, including investment consultants.
