Fragmentation in stewardship approaches and misalignment between asset owners and managers is creating inconsistencies in engagement and voting strategies, a report from Pensions for Purpose has suggested.

The report, which was sponsored by Robeco, in partnership with Border to Coast, IGG and TPT Investment Management, identified an inconsistency in stewardship approaches across asset owners, with "significant" variations in voting, engagement and accountability.

In particular, the research revealed that smaller funds especially are struggling with resource constraints, making it difficult to implement structured stewardship programmes effectively.

In addition to this, the report found that ensuring asset managers adhere to asset owner priorities continues to be a "major concern".

According to the report, some asset owners report significant discrepancies between their intended stewardship objectives and the actual voting behaviour and engagement strategies executed by managers, leading some to conduct voting internally or through a third-party.

The report also showed that while asset owners are increasing the robustness of their assessment of managers' stewardship efforts, the lack of rigorous oversight mechanisms exacerbates these challenges, making it difficult for funds to maintain alignment with their long-term investment principles.

Given this, the report called for stronger governance and accountability, urging asset owners to align their stewardship strategies with systemic risks.

Indeed the report suggested that structured oversight and clearer communication with asset managers are seen as "critical" to improving accountability and ensuring stewardship efforts translate into, long-term positive impact.

Collaboration was also highlighted as an essential tool for overcoming resource constraints and amplifying investor influence on systemic issues.

In partiuclar, the report suggested that, by participating in industry-wide initiatives, asset owners can pool their expertise and resources to drive change on pressing matters such as climate change, biodiversity and broader social governance concerns.

Pensions for Purpose senior director & community lead, Richard Giles, said: “The report highlights the importance of systemic stewardship in managing long-term risks.

"Asset owners must take a proactive approach by strengthening governance, ensuring alignment with asset managers and engaging collaboratively at an industry level.”

Robeco head of active ownership, Peter van der Werf, added: “Sustainability investing sits at the core of Robeco’s investment beliefs. With growing sustainability risks from climate and biodiversity for pension funds in a complex geopolitical environment, we encourage asset owners to enhance their stewardship efforts.

"Aligning accountability and consistency in engagement and voting by their asset managers will help to deliver this commitment to their beneficiaries.”

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