ESG and stewardship are under attack. The re-election of President Donald Trump has prompted a regulatory pushback in the US on responsible stewardship. As a result, some of the biggest asset managers are reconsidering how they engage with companies.
In February, the Securities and Exchange Commission updated its guidance on fund managers that hold companies to account over ESG factors. Managers now have to submit a lengthy document known as a 13D filing, which, according to law firm Cooley, “requires significant disclosure” on areas such as ESG proposals with respect to the company.
Commentators fear that the change will discourage ESG stewardship. BlackRock and Vanguard are by far the most affected by the new SEC guidance, according to Free Float Analytics research cited by Reuters. Both managers paused stewardship meetings to digest the new SEC guidance, although BlackRock has since restarted its meetings.
Asset managers’ nerves are understandable. For years, Republican legislators have piled pressure onto managers over their ESG activities. In some cases, the very same managers have come under fire from the other end of the political spectrum, over their apparent inaction on ESG.
As temperatures rise in both the atmosphere and the political climate, it matters now more than ever to make the case for stewardship as a tool of financial risk management, rather than a way of ideological posturing.
Stewardship is risk management
Stewardship remains essential for long-term value creation. The ability to influence how companies act is a critical form of risk management for investors. Asset managers can also help decision-makers understand external sentiment through stewardship.
If shareholder votes are to be judged by their success, then they are becoming a less effective stewardship tool. Support for shareholder resolutions has hit an all-time low, according to ShareAction, in a trend that has been driven by the largest US asset managers.
Of the 279 ESG shareholder resolutions assessed by the non-profit in a February 2025 report, just four received majority backing. In a sign of a deepening Atlantic divide, ShareAction notes that European asset managers voted in favour of 81 per cent of shareholder resolutions on average, compared to US managers which supported just a fifth of resolutions.
Investors must therefore transition from broad, compliance-driven ESG strategies to a more focussed engagement approach. The challenges of getting shareholder proposals to succeed increase the importance of other stewardship tactics.
Engagement with companies behind closed doors affords both executives and investors the freedom to discuss ESG without public scrutiny. These conversations are enhanced by data, which in turn requires best-in-class technology.
Technology delivers real ESG results
Technology and data, as combined by tools such as the Maanch Engagement Tracker, are helping asset managers conduct more outcome-oriented engagement.
For years, many investors have relied on spreadsheets to record their company engagements. This approach can slow down the engagement process and lends itself to inaccuracies. Having modern technology to accurately record engagement will increase the efficiency of your stewardship team.
It will also help investors meet their obligations to regulators and voluntary initiatives. For example, the UK Stewardship Code sets 12 principles for asset managers and asset owners. Signatories report against this code to highlight their commitment to good stewardship.
The code looks likely to be revised pending the outcome of a consultation that closed in February, which aims to streamline the reporting process. Nevertheless, as these reporting requirements change, having accurate stewardship data will be vital to ensure that signatories remain in compliance with the code.
The same goes for asset managers hoping to stay on the right side of the SEC. Dealing with its increasingly complicated disclosure process for ESG stewardship will require accurate and accessible stewardship data.
It’s a challenging time to conduct ESG stewardship. Sweeping regulatory change across the world is putting pressure on stewardship teams. There has never been a bigger onus on having quality data to secure optimal outcomes through stewardship.
But as the world slips in its pursuit of its climate objectives, and the risk to returns gets ever greater, asset managers cannot give up on ESG stewardship now.
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.
