A steering group to examine how stewardship and a focus on long-term investment can be better integrated into the investment process has been launched by the Investment Association (IA) and the Pensions and Lifetime Savings Association (PLSA).

The group, which held its inaugural meeting this week, will be co-chaired by PLSA chair, Richard Butcher, and Standard Life Aberdeen global head of investment governance and oversight, Archie Struthers.

It will bring together asset owners, investment managers and other relevant stakeholders, and will cover range of issues designed to strengthen the relationship between asset owners and investment managers.

This includes, for instance, the proactive steps investment managers can take to understand and deliver clients’ stewardship priorities, and the role of asset owners in ensuring stewardship plays a key role in manager selection and ongoing performance and oversight assessment.

The group is expected to help deliver the recommendations outlined by the Asset Management Taskforce Stewardship Working Group in November last year, and will address the issues raised by the Financial Conduct Authority in its statement on building a regulatory framework for effective stewardship.

It also follows the PLSA's 2020 report, A Changing Climate: How Pension Funds can Invest for the Future, which identified a number of key barriers, such as a lack of clear definitions, poor quality data, and the need for clearer requirements.

Commenting on the initiative, Butcher, emphasised the need to overcome such barriers, highlighting the relationship between asset managers and asset owners as "vital" in order to achieve the objective of investing for good.

He continued: “If pension schemes are to deliver on an intention to invest in a climate-aware fashion they need to articulate that intention clearly enough that it will be delivered by their agents.

“This new group will develop ideas for overcoming these barriers and in doing so will significantly move the cause of investing for good forward. I’m personally and on behalf of the PLSA really glad to be involved.”

Adding to this, Struthers stated: "Asset managers must meet, and evidence how we are meeting, the increasing expectations of savers to manage their money in a responsible way. In short, our mandate to operate is dependent on us demonstrating our commitment to responsible stewardship.

"Our industry is best served if we collaborate closely with asset owners - and their appointed representatives - to manage savers’ assets on the basis of a common understanding, using definitions of success that better reflect society’s expectations."

IA Stewardship Manager, Sarah Woodfield, added: “Investment managers have an important role to play in generating long-term returns for millions of UK pensioners.

“By working together with pension schemes, we can further embed stewardship within the investment process to ensure our members are delivering long-term sustainable value, that not only meets schemes’ financial objectives, but will also deliver on their environmental, social and governance aims.”

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