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#Good stewardship definition how to

Negotiating with, and monitoring others in the investment chain (e.g.Engaging in public discourse and disclosures that support stewardship goals.Contributing to public goods (such as research).Engaging with policy makers and standard setters.Fulfilling direct roles on investee boards and board committeesĮxamples of ways to influencing other stakeholders:.Filing shareholder resolutions/proposals.Engaging with current or potential investees/issuers, across all asset classes.

This includes the value of the common economic, social and environmental assets 1 on which returns and clients’ and beneficiaries’ interests depend.Įxamples of ways to influence investees and issuers: Stewardship is investors using their influence over current or potential investees/issuers, policy makers, service providers and other stakeholders – often collaboratively – to maximise overall long-term value. Engagement can also be with non-issuers, such as policy makers or standard setters.Įxercising voting rights on management/ shareholder resolutions (and submitting resolutions), to formally express approval (or disapproval) on relevant matters. Interactions between an investor and current or potential investees/issuers, in order to: improve practice on an ESG issue, change a sustainability outcome in the real world or improve public disclosure.

Seeking to combine attractive risk-return profiles with an intention to contribute to a specific environmental or social outcome. Investors can exert influence through tools including: engagement and voting – two of the most widely used tools – resolutions/proposals, board roles, supplier monitoring/negotiation, contributing to research and public discourse, litigation.Įxplicitly and systematically including ESG issues in investment analysis and decisions, to better manage risks and improve returns.Īpplying filters to lists of potential investments to rule companies in or out of contention for investment, based on an investor’s preferences, values or ethics. (known as: active ownership or stewardship)ĮSG issues can be incorporated into existing portfolio construction practices using a combination of three approaches: integration, screening and thematic. Improving ESG practices, outcomes and disclosure 3 Considering ESG issues when building a portfolio Responsible investment involves both, including each feeding back into the other, for example by using insights garnered from engagement 2 to enhance investment decision making – and vice versa. Stewardship and ESG incorporation (which sees investors include ESG factors in their investment and capital allocation decisions) are complementary strategies. The PRI defines stewardship as “the use of influence by institutional investors to maximise overall long-term value including the value of common economic, social and environmental assets, on which returns and clients’ and beneficiaries’ interests depend.” 1

#Good stewardship definition how to

It guides investors on how to implement the PRI’s Principle 2, which sets out signatories’ commitment to stewardship, stating: “ We will be active owners and incorporate ESG issues into our ownership policies and practices”.

It explains the importance and relevance of stewardship within responsible investment and outlines the stewardship tools investors can incorporate into policies, processes and practices.

This guide introduces the topic of stewardship, also known as active ownership.

Introduction to responsible investing academic research.

Private retirement systems and sustainability.

UN-convened Net-Zero Asset Owner Alliance.

Environmental, social and governance issues.

Strategy, policy and strategic asset allocation.

Introductory guides to responsible investment.

PRI China Conference: Investing for Net-Zero and SDGs.Diversity Equity & Inclusion for our employees.What are the Principles for Responsible Investment?.