Stewardship misalignment dominates among larger managers UK Asset Owner Roundtable finds

Misalignment on climate stewardship is the most pronounced between larger asset managers and asset owners, according to a survey commissioned by the UK Asset Owner Roundtable.

Following a challenging AGM season, with some of the biggest oil and gas firms backtracking on their net zero pledges, asset owners have expressed growing frustration that their stewardship efforts on climate are not aligned with those of their managers, who tend to display more conservative voting patterns.

Faith Ward, chief responsible investment officer at Brunel Pension Partnership and chair of the UK Asset Owner Roundtable initiated an investigation into the potential for misalignment by commissioning Andreas Hoepner, professor of Operational Risk, Banking & Finance at University College Dublin to conduct some research.

Initial findings of Hoepner's report have now been released and highlight some nuance to the perception of misalignement. 

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The research, focused on stewardship patterns at the biggest European oil and gas firms found that there was indeed misalignment between managers and owners on climate stewardship.

However, this pattern was more pronounced among larger asset managers while smaller, specialist asset managers tended to vote more similar to asset owners.

Hoepners research also found that the misalignment was more pronounced when it came to voting on shareholder resolutions, with asset owners being relatively more likely to back activist proposals and larger managers in particular taking a more conservative stance.

The findings of the new study were subject of a roundtable taking place this week at London Stock Exchange with both asset managers and owners in attendance.

Commenting on the debate, Ward said that initial discussions with managers had been positive and that managers had displayed a willingness to take the findings on board. “We have identified some practical steps to ensure we better inform and support fund managers in delivering against asset owners’ climate stewardship strategies” she said.

The UK Asset Owner Roundtable did not disclose which managers and owners participated in the debates but said that the roundtable had  54 attendees, split between asset owners and asset managers, along with representation from PRI, the IIGCC, FCA and UKSIF.

A summary of this week’s debates will be included in a final report on stewardship alignment to be released later this year.