UK asset owners continue to see stewardship as both effective and financially meaningful, despite perceptions of an ESG backlash.
A survey of 100 investors by Hymans Robertson found that 42% expect stewardship activities to add between 1% and 3% a year to financial outcomes, while only 12% believe engagement delivers no benefit. Overall, 87% said stewardship is effective in driving change.
The findings come amid claims of an ESG backlash. The report found that 81% of UK asset owners say ESG is more important than two years ago, while 90% believe ESG issues are becoming more complex.
Is the ESG backlash real?
Hymans Robertson’s data suggests a more nuanced picture. Nearly six in 10 (59%) asset owners say stewardship has become harder, reflecting regulatory changes and a more complex ESG landscape for asset managers and companies.
Despite this, investor expectations remain high. Most respondents expect managers to strengthen their responsible investment capabilities and play a greater role in addressing systemic risks such as climate change.
Hymans Robertson said the findings reflect its view that last year’s regulatory guidance changes have limited the ability of large US asset managers to proactively influence companies, weakening clear messaging and accountability.
“In the US, intense political rhetoric and reversals of climate policies have fuelled a perception that responsible investment (RI) is no longer relevant. Because when large US asset managers and service providers reduce their sustainability activities, doesn’t the rest of the world follow suit?” the report said.
“We don’t accept this narrative, and, crucially, it isn’t what our clients tell us about their beliefs and needs,” Hymans Robertson added.
Looking ahead
The report outlines steps asset owners can take to strengthen stewardship in a more complex environment, including further training on emerging systemic risks, updating RI policies to clarify expectations of asset managers, and carrying out more detailed assessments of managers’ ESG capabilities.
Hymans Robertson also urged investors to continue engaging with managers and companies, while regularly reviewing the effectiveness of their stewardship programmes and integrating the insights gained into investment decision-making.
According to the report, a structured and evidence-based approach to engagement will become increasingly important as ESG issues grow more complex and expectations of active ownership rise.
“In short, despite the political noise and regulatory climate in the US, we found that most UK asset owners recognise the importance and complexity of ESG issues, expect more of their managers and still believe in the value of stewardship,” the report concluded.
