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One highly effective way asset managers can win the trust and loyalty of asset owners in stewardship

One highly effective way asset managers can win the trust and loyalty of asset owners in stewardship

Discover how sharing engagement data with clients not only builds trust but also unlocks a new level of partnership, innovation, and stewardship success

April 25, 2024

As an asset manager with institutional investment clients, you are likely to be carrying out stewardship activities on their behalf, because let’s face it – stewardship is now expected as part of today’s “business as usual”.

  • You’re likely to be a signatory to the PRI, Stewardship Code and involved in various industry and collaborative engagement initiatives.
  • You’re integrating ESG in the investment process.
  • You’re probably finding ways to better ways to track and manage your growing stewardship activities (if not, then this should be on your priority list!).
  • You’re spending huge amounts of time and resources on creating engaging, (non-greenwashed) reports to meet client and regulatory requirements.

If this was 5 years ago, you might have been one of a few asset managers nailing it. But today, you’re competing with a vast number of managers claiming to be doing the same things.

So how can you differentiate yourself enough from every other asset manager to go that extra mile and delight existing clients -- and potentially win more mandates?

I believe one of the things you can do to truly stand out is this:

Offer to give your clients access to your underlying engagement data.

And it’s not complicated, because you should already have this information at hand.

This suggestion can be a point of contention that many asset managers are uncomfortable with, but understanding the perspective of asset owners on this is crucial. It’s also a win-win.

Read on to find out why.

1. Stewardship reports are great, but they are not client portfolio-specific

Stewardship reports have no doubt improved the standards of stewardship reporting and have helped investors focus on articulating the objectives and outcomes of their core stewardship activities over a given 12-month period. However, these reports are entity-level and focus on demonstrating and evidencing how the firm has applied the Code. They contain a mixture of high-level policy statements, updates on engagement themes, handpicked case-studies, anecdotes and stats on numbers and (some) outcomes of engagements over that year.

In a recent article in Responsible Investor, Hilkka Komulainen, Head of Responsible Investment at asset owner Aegon UK said that managers will often just point to their stewardship report when questioned on engagement. “The challenge with that is that it’s not necessarily tailored to us as a client and our portfolio.” Even when data points are disclosed in stewardship reports, they are “quite high-level”, such as the number of meetings with a company, or how the engagements are spread across E, S and G issues.

This point has been echoed by numerous asset owners I have spoken to, for example in our webinar on effective stewardship and reporting last year, Diandra Soobiah of Nest asserted that the number of engagements an asset manager has conducted on their behalf is the least meaningful data they can report to their beneficiaries. This also comes from my own first hand-experience in my role as a stewardship lead at a pension scheme and experiencing the challenges of reporting on engagements led by external managers.

2. Asset managers can prioritise quality engagement over information requests

Even where asset managers do provide portfolio-specific reporting, the depth of engagement data and insights can vary from one manager to another. Their most interested clients will want to interrogate this more deeply, and asset managers may prefer to have resource focused on delivering quality engagement rather than responding to detailed additional requests on high-level engagement activity.

3. Asset owners’ resources are limited

Asset owners operate in a complex ecosystem, managing diverse portfolios, member needs and reporting, while grappling with resource constraints. With multiple managers vying for attention, asset owners lack the bandwidth to sift through voluminous reports to join the dots on what risks their portfolios are exposed to. They then end up requesting information on specific engagements, themes and controversies with back-and-forth emails and meetings.

While many asset managers provide their clients with periodic client reports, they seldom contain detailed engagement data.

4. Providing underlying data helps asset owners mitigate greenwashing

Asset owners have the difficult task of aggregating and synthesising the stewardship activities of multiple managers in their reporting. By providing more transparency and evidence of engagement activities, asset managers empower asset owners to report with more confidence on the sustainability claims in their portfolios. This not only helps ward off potential greenwashing risk but builds trust and helps asset owners fulfil their fiduciary responsibilities.

But many asset managers are uncomfortable with providing this underlying data. Why?

Here is some of the pushback I’ve been given by asset managers I’ve spoken to:

Pushback 1: “Our conversations are behind closed doors, and we don’t want to jeopardise the progress of our engagements/our relationship with the company”.

This implies mistrust of the client at the outset. Your clients have entrusted you to represent their assets in your engagements because of your expertise and capabilities. It would not be in their interest to jeopardise engagement progress.

A legitimate concern is that the asset owner may use that information out of context or expose it publicly. To mitigate such concerns, it is important to set out clear expectations on how this information is used by the client and formally agree this in the IMA or any side-letters.

Pushback 2: “Every client wants different data points -it would be impossible to manage”

Agree that this can be overwhelming initially, but the way to overcome this is to understand why clients are asking for specific datapoints and for the asset manager to provide guidance on the pros/cons and feasibility. There will be a set number of data points that will be a best common denominator to satisfy the core needs of the majority of clients.

At its most basic, the engagement data can include:

  • Company or other entity engaged (such as a public body)
  • Date
  • Type of interaction
  • Content of interaction (note this shouldn’t contain sensitive information e.g. insider information)
  • Engagement objective it relates to
  • Who conducted the interaction (stewardship analyst/ fund manager?)
  • Who the engagement was with at the company (CSR, Board, CEO, IR?)
  • What was the outcome of this interaction(engagement outcome, investment outcome?)
  • How did move the engagement objective’s milestone progress forward?
  • Next steps

There may be other indicators that asset owners might find useful, such as linkage to voting decisions.

Discussing these indicators with clients and why they matter can be a win-win for both parties. 

Pushback 3: “We don’t have the resources/ technology to meet this need”.

While it's understandable that implementing a system to provide detailed engagement data may seem daunting, it's essential to recognise the long-term benefits for both asset managers and their clients. Investing in the necessary resources and technology to meet this need can pay dividends in the form of enhanced client satisfaction, efficiency, increased transparency, and strengthened trust.

The great news is such technology exists today. The Impactive Platform acts both as a best-in-class engagement management tool as well as a client portal to help investors collect, organise, and present stewardship data efficiently.

Screenshot of engagement objectives in the Impactive Platform

Asset managers have the option of creating “private” and “client-ready” notes to ensure they are in control of any sensitive data.

Again, this is a win-win because it gives clients control over what they want to see and download and saves the asset manager time from manual back-and-forth provision of information.


Embracing transparency through the provision of underlying engagement data not only differentiates asset managers in a crowded market but also fosters trust, empowers asset owners, and strengthens stewardship efforts. While pushback is inevitable, addressing concerns with practicality and vision can unlock a wealth of opportunities for both asset managers and asset owners. By leveraging available technology, asset managers can prioritise quality engagement whilst gaining efficiencies in reporting and client service.

Ready to be a pioneer?

Impactive’s stewardship management platform was purpose-built for high-quality engagement tracking and ESG integration. With its user-friendly interface, investment and stewardship teams can immediately get started. It's built-in asset owner portal helps you effortlessly provide your clients with real-time access to your meaningful engagement data.

Get in touch for a free trial today.

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