Stewardship resources should double

Stewardship is under-resourced as investors grapple with assessing how organisations align with the ambitions of clients and beneficiaries.

Resources dedicated to the values of responsible planning and management of an organisation, need to double as a proportion of total investment resources at industry level.

Industry average stewardship resourcing currently sits at around 5% as a percentage of total investment management costs.

This includes expenditure on internal staff, third party providers, data, subscriptions, memberships and reporting costs.

These are the findings of a new research report from the Thinking Ahead Institute (TAI), commissioned by the United Nations-supported Principles for Responsible Investment (PRI).

The research comes out of a technical working group of PRI members and a survey of 69 entities with US$16 trillion in assets under management globally.

TAI today launched a new tool called the Stewardship Resources Assessment Framework, which proposes a structured approach to measure stewardship resources.

TAI head Marisa Hall said stewardship is essential to support long-term value generation.

"Stewardship has always played a crucial role in the investment industry but is too often under-resourced," Hall said.

"This work has further strengthened our understanding of the many nuances and challenges of resourcing stewardship - even as the industry increasingly recognises stewardship not merely as a necessary function but as a system-level and value-adding feature."

PRI chief sustainable systems officer Nathan Fabian commented: "Strong stewardship is needed now more than ever to fulfil fiduciary duties and deliver on client and beneficiary interests over the long term. These ambitions can only be met with adequate resourcing at industry level.

"We call on investors to pave the way for data-driven approaches to stewardship resourcing which foster accountability, transparency, and ultimately, impactful change."

Hall added: "We look forward to feedback from across the global investment industry on next steps and many future discussions on implementing these findings."

Read more: PRIMarisa HallNathan FabianThinking Ahead Institute