Introduction

The landscape of investment stewardship is evolving rapidly. What was once primarily incident-driven has expanded to a broader focus on risk, opportunities, and thematic engagement areas like biodiversity, human rights, and net-zero initiatives. Today’s investors are demanding more data points, seeking deeper insights, more collaboration and requiring customised reporting to satisfy the expectations of various stakeholders. These are some of the insights that came through our joint Maanch & Morningstar Sustainalytics Webinar discussion. In this blog, we will be giving an overview of the main topics that came out from the conversation on the evolution of Stewardship. 

The Shift to Customised Reporting:

In recent years, there has been a marked increase in the demand for more detailed and credible stewardship reporting. This shift has driven the need for bespoke, customised reports that are tailored to the unique needs of each client. Key questions that asset managers now face include:

• How do we track progress effectively?
• How do we report on engagement escalations?
• How do we ensure alignment between research, engagement, and voting recommendations?

At Maanch, we aim to provide a holistic answer, aligning research and engagement for a seamless stewardship experience. This approach addresses a significant challenge: ensuring that different parts of an organisation operate with a unified understanding of stewardship goals.

Partnerships for Evolving Needs:

A key aspect of this evolving landscape is the shift from static product offerings to dynamic, continuously improving solutions. Our collaboration with clients has become more of a partnership, aimed at understanding and addressing their developing needs. This ongoing dialogue means that stewardship solutions must remain adaptive, continuously improving in response to shifting client requirements.

Additionally, as Stewardship requirements keep evolving, partnerships and collaborations between ESG & Stewardship solutions are essential. Providers need to share insights and knowledge to be able to adequately serve the industry needs. We are very proud to announce our recent partnership between Maanch and Morningstar Sustainalytics. This collaboration is the first of its kind, and offers investors unparalleled access to comprehensive stewardship data and engagement services.

The Impact of the 2020 Stewardship Code:

The 2020 Stewardship Code marked a pivotal shift in the global approach to stewardship. Now, as we look towards its update, the landscape feels markedly different. Complexity has increased, driven by the growing need to accommodate varying investor preferences and the increased demands for transparency and accountability. This has made implementing effective stewardship strategies more challenging, yet also more essential.

Embracing Complexity in Stewardship:

The future of stewardship is undoubtedly more complex. The focus has shifted from counting the number of engagements to delivering meaningful outcomes and demonstrating clear progress. Today, investors and fiduciaries must navigate a landscape that requires them to be both outcome-focused and activity-aware. This dual focus ensures that engagement activities align with clearly defined objectives while maintaining transparency in reporting.

A Global Perspective: Beyond the UK and EU:

While the UK’s Stewardship Code has set a benchmark, other markets are starting to catch up, with regional initiatives emerging that drive consistency in stewardship reporting. The challenge, however, remains the varying expectations across markets, with some clients focusing on metrics like the number of conversations mentioning specific initiatives like SBTi (Science-Based Targets initiative). The demand for regionally consistent stewardship frameworks continues to grow, shaping the way firms align their global engagement strategies.

Towards Timely and Relevant Data:

One persistent challenge in stewardship is the backward-looking nature of ESG data. Our approach involves ensuring that clients have the most up-to-date information available, incorporating recent publications and engagement dialogues. This focus helps investors balance retrospective data with forward-looking insights, making engagement discussions more impactful.

Conclusion: A Collaborative Future

As stewardship continues to evolve, partnerships between asset managers, investors, and stewardship service providers are more critical than ever. The goal is to provide clarity, transparency, and meaningful insights that drive positive change across portfolios. At Maanch, we are excited to be at the forefront of this transformation, helping our clients navigate the complexity of today’s stewardship landscape and build a more sustainable future.

This new era of stewardship demands a combination of innovation, collaboration, and a relentless focus on delivering measurable impact. Through partnerships and technological advancements, we believe that the future of stewardship holds promise for more effective, transparent, and impactful investment practices. Maanch & Sustainalytics’ new partnership is central to the increasing industry collaboration.