The UK Investment Consultants Sustainability Working Group (ICSWG) published new guidance today to improve the engagement reporting provided by asset managers and platform providers to institutional clients.
The ICSWG, in collaboration with Barnett Waddingham and 18 other companies, has published the new guide to assist asset managers and platform providers in improving the engagement reporting they provide to institutional clients. The ICSWG engagement reporting guide is the first in a series of asset manager guidance documents by the ICSWG.
Barnett Waddingham says regulators are increasingly relying on asset owners to encourage active stewardship. Transparency in engagement activity is critical for making stewardship more accessible to asset owners, allowing them to assess the level and quality of activity performed on their behalf.
In addition to obtaining information on behalf of clients, investment consultants often face challenges in getting appropriate data, with managers citing a high burden resulting from a wide range of information requests from different parties.
The engagement reporting guide is intended to provide targeted engagement metrics and case study formats to assist investors in evaluating their managers’ stewardship, with a focus on the outcomes achieved. The data collected is intended to supplement asset managers’ reporting per the UK Stewardship Code. Case studies describe the rationale and goal of the engagement and the approach, including any escalation and the outcomes.
The ICSWG enlisted the help of asset managers, industry bodies, policymakers, and regulators to develop this guide. It complements the UK Pension and Lifetime Savings Association (PLSA) Vote Reporting Template, which solicits and collects data from asset managers and platform providers and aligns with the UK Stewardship Code 2020.
Barnett Waddingham associate and policy & strategy lead and ICSWG stewardship workstream chair Amanda Latham says: “Long term, sustainable investment practices are of paramount importance if we are to encourage positive change in the world. Effective stewardship goes beyond voting on shares. Reporting on broader engagement activities improves accountability and highlights the impact that the asset management industry has on a wide range of issues. Undertaking effective stewardship is one of the ways asset owners like pension trustees can create long-term value for beneficiaries leading to sustainable benefits for the economy, the environment and society. This guide should help improve engagement reporting, bringing greater transparency and consistency to the process, and shows the importance of collaboration across the investment consulting firms to drive better stewardship.”
WTW head of equities and investment stewardship Stephen Miles says: “Good stewardship can be the most powerful function the asset management industry performs. But stewardship has too often been placed at the bottom of asset owner agendas given measurement challenges. We hope this new guide will help asset owners, asset managers, and investment consultants more consistently communicate and appreciate high-quality stewardship.”
