The Investment Consultants Sustainability Working Group (ICSWG) has launched a new tool designed to assess both the voting practices and engagement activity carried out by asset managers.
The ICSWG says this should help “bring clarity” to the issue of whether this activity is in line with the stewardship and responsible investment principles of asset owners.
It adds that investment consultants play an important role in this process. This is principally achieved by referencing an asset owners RI beliefs and stewardship expectations, and comparing them to the voting and engagement activities of their investment managers.
ICSWG co-chair and head of sustainable investment at Isio, Cadi Thomas, says: “As regulation and market practice around investment stewardship evolves, asset owners are facing increasing expectations that stewardship activities are meaningful, well‑governed, and aligned with their fiduciary duties.
“The new ICSWG tool provides a structured framework, using a practical flow chart that guides asset owners through an assessment of their managers’ proxy voting decisions and engagement activity, and determines how closely those resonate with their own investment stewardship beliefs and approach.”
Aon sustainability research lead Mette Charles says: “This Asset Owner Investment Stewardship Alignment Tool is designed to bring greater clarity and structure to conversations between asset owners and their investment managers. By focusing on voting and engagement in an applied way, it helps asset owners assess whether stewardship activities are genuinely aligned with their own beliefs and expectations and provides practical suggestions where gaps emerge.”
Claire Jones, Head of Responsible Investment at LCP, said: “The ground-breaking 2024 paper by the Financial Markets Law Committee (FMLC) about fiduciary duties said, in relation to stewardship, that ‘pension fund trustees will wish to have processes for the proper communication of their stewardship expectations and proper oversight of the investment managers’ work to reassure themselves of its effectiveness in mitigating risks and supporting returns’.
“The ICSWG tool is designed to help trustees with this monitoring process through helping them assess and improve the alignment of their investment managers’ stewardship with their own expectations and beliefs.”
The new tool is available from ICSWG’s website.
