Stewardship is an essential activity for investors looking to manage environmental, social and governance risks. But problems such as inadequate data systems and internal infrastructure are holding investment teams back. In return it hinders their ability to capitalise on the opportunities presented by effective stewardship.

Investors value stewardship

Voting at shareholder meetings, filing proposals and exerting influence over the appointment of directors are all tools available to investors who want to ensure that their investee companies are on the right path to long-term profitability. Stewardship can also be wielded to ensure that an investee company is performing in a way that aligns with an investor’s values, as well as rules and codes around ESG.

While shareholder proposals tend not to secure majority support at AGMs, they nevertheless provide a useful signal to a company’s board over issues such as executive pay. Public stewardship can also set the tone for other, more private means of engagement between investors and executives.

Investors, regardless, do think that stewardship makes an impact on investment performance. According to PwC research: in 2024 72 per cent of investors expect their stewardship activities to have an impact on investment performance over the next three to four years.

Good investment stewardship is about more than simply wanting companies to cut their carbon emissions, or pay directors appropriately. Stewardship requires adequate resourcing, quality data systems and an understanding of regulation. Our interactions with the market tell us that these crucial conditions for stewardship can be found lacking.

Five challenges for investment teams:

Below, we highlight five challenges that hinder effective stewardship and stall investment teams’ progress.

Challenge #1: Securing Leadership Support

Investment professionals regularly encounter difficulties in securing buy-in from upper management over stewardship. Tight budgets limit stewardship activities, while teams find it hard to justify costs and obtain support from leadership for stewardship projects.

According to research by the Thinking Ahead Institute, stewardship resources made up just 7 per cent of the total investment resources held by asset managers and asset owners. The TAI concluded that “a more structured approach to the measurement of stewardship resources is needed”.

Maanch has constructed a user-friendly Stewardship Tools Cost-Benefit Calculator, which provides clear insights into the advantages and disadvantages of using rudimentary spreadsheets versus more sophisticated software, like the Maanch Engagement Tracker. 

Our ROI calculator helps investors to measure savings – identifying cost reductions and improvements to efficiency over a three-year window – as well as supporting clients in reaching data-driven decisions, and ultimately win the support that investment teams need from executives to conduct stewardship.

Challenge #2: Outdated Data Systems

Many investment teams believe that their existing data systems cannot integrate with new tools. Coupled with a lack of resourcing, this leaves professionals stranded with old technology. Leaving them playing catch-up with the rest of the market.

Ninety per cent of the investment teams that Maanch has spoken to are still using spreadsheets to carry out stewardship. This leaves investment teams vulnerable to human error and counting the cost of time-intensive processes, as well as struggling with a lack of scalability and trapping data in silos.

We recognise that investment teams are all different, and have a wide range of needs and priorities. Our team supports clients with custom integration, ensuring that they have the components of the Maanch suite that they need to maximise their ability to conduct stewardship.

Consolidating all portfolio engagements into a unified dashboard, importing and linking voting records to engagements and tracking engagements against actions and milestones are just some of the ways that using Maanch can help investors get ahead of competitors using spreadsheets.

Challenge #3: Streamlining Multiple Tools

Some investment teams are already using multiple platforms. They don’t want to double-up on data entry, while adding more platforms feels like a burden, and not a solution.

One strength of the Engagement Tracker is its ability to automatically pull data from other systems, such as emails, calendars and notes, in order to ensure a smooth integration of platforms and information. Maanch has integrated Morningstar Sustainalytics’ stewardship data into the Engagement tracker, which offers asset managers and institutional investors unrivalled access to comprehensive stewardship data and engagement services.

Maanch provides secured file storage space, as well as data encryption, data back-ups and secure cloud hosting in order to ensure the security of customer data.

Challenge #4: Low Regulatory Urgency

Stewardship reporting tends to be annual and voluntary. This means that until customers need to report their stewardship activities, it doesn’t feel like a priority for investment teams.

Engagement is part of a team’s risk management activity, however. Engagement data is an asset, and understanding its importance in a world of increasing ESG regulation is more than just about compliance. The Engagement Tracker is built around key stewardship regulation, which helps users generate real-time reports to help them fulfil their reporting duties. We have built a deep source of analytics to help teams proactively manage risks and their stewardship priorities.

Challenge #5: In-House vs External Solutions

Investment teams remain stuck between the choice of building a platform in-house, or relying on external platforms. The latter option risks issues surrounding data privacy and control.

Pivoting from spreadsheets need not expose investment teams to cybersecurity risks. Data privacy is central to the Maanch offering, a philosophy that is evidenced by the platform’s secure cloud-based architecture. Customers receive interactive onboarding, round-the-clock online support and a dedicated success manager, to ensure that they feel secure and safe when using Maanch.

If you would like a demonstration of the Maanch Engagement Tracker, please book an introduction with our founder and chief executive officer Darshita Gillies via this link.