UK – Only two in five investment consultants raise the issue of stewardship with their pension fund clients, a report by the UK National Association of Pension Funds (NAPF) has shown.

According to the survey, a further quarter of respondents said stewardship issues had not been raised by either party in their discussions, with a number of pension funds arguing that other matters take precedence over issues such as signing up to the UK's Stewardship Code.

Commenting on the lack of action on behalf of consultants, NAPF chief executive Joanne Segars said: "As key intermediaries between pension funds and asset managers, investment consultants could do more to encourage the take-up of the code by explaining its relevance to their pension fund clients.

She added that she believed increased engagement by consultants could help drive up the number of signatories among pension funds.

The NAPF's Engagement Survey nonetheless found that the overwhelming majority of pension funds were aware of the Stewardship Code and had discussed either it or corporate governance formally in the last 12 months.

"Encouragingly, only 10% of funds indicated that stewardship was never formally discussed in their trustee meetings, while nearly half of funds said they discussed it on an annual basis, and over a quarter of funds have delegated to a sub-committee that has responsibility for this issue," the report said.

Nonetheless, 40% of respondents had yet to commit to the Stewardship Code, and of that 40% had no intention of committing at all.

The survey noted that there were two "dominant" reasons for the lack of commitment.

"The most commonly cited barrier was simply that other priorities take precedence," the report said.

"This is unsurprising given the many issues that compete for the trustees' finite agenda time, such as funding, administration, membership, de-risking, fund governance and investment strategy.

"The second most commonly cited barrier was a lack of belief in value added – again, an unsurprising response given the often difficult task of quantifying the benefits of engagement and stewardship."

Broken down, 87% of respondents said there were other priorities over and above discussing and formally signing up to the Stewardship Code, while 53% also said it was a lack of belief that stewardship added value to investments.

However, a majority of those funds that committed to the Stewardship Code worked its principles into their investment management contracts or amended their Statement of Investment Principles to reflect their beliefs.

The importance of stewardship was also reflected in a 23-percentage-point increase – from 48% to 71% – in respondents who said they took a manager's stewardship activities and policies into account during manager selection.

Segars said: "We are particularly encouraged that more pension funds are considering the stewardship activities and policies of asset managers before appointing them, and that they are monitoring their managers' application of their stewardship policy."

The survey also found that 62% of respondents then went on to monitor their manager's compliance with the in-house stewardship policy.