Investment stewardship resources need to double at an industry level, a report from the Thinking Ahead Institute (TAI) has said, after it found that stewardship is currently under-resourced in the global investment industry.

The report, which was commissioned by the United Nations-supported Principles for Responsible Investment (PRI) as part of its Active Ownership 2.0 programme, found that the industry average stewardship resourcing level is currently at around 5 per cent.

Examples of resourcing include spend on internal staff time, third party providers of stewardship services, data, subscriptions, memberships or reporting costs.

However, there was a "clear view" that the level of resources need to increase, where this is aligned with investors’ fiduciary duty, as respondents agreed that the current level of stewardship resources in the investment industry is inadequate and not fit-for-purpose.

Given this, the report suggested that resources dedicated to the stewardship of investment capital should double as a proportion of total investment resources at industry level, over a multi-year period, to better meet the increased demand and needs.

The report acknowledged that the industry currently lacks the measures of costs needed to unpack the resourcing model for stewardship though.

It therefore also launched a Stewardship Resources Assessment Framework, which is designed to enable the investment industry to assess the resources available to stewardship efforts in a more structured way, as well as the subsequent improvement of such stewardship efforts over time.

Commenting on the report, UN PRI chief responsible investment officer, Nathan Fabian, argued that strong stewardship is needed “now more than ever” to fulfil fiduciary duties and deliver on client and beneficiary interests over the long term.

“These ambitions can only be met with adequate resourcing at industry level,” he continued. “We call on investors to pave the way for data-driven approaches to stewardship resourcing which foster accountability, transparency, and ultimately, impactful change.”

Adding to this, TAI head, Marisa Hall, said: “Our collaboration with the PRI on this essential project is driven by our mission to support long-term value for the investment community.

"Stewardship has always played a crucial role in the investment industry but is too often under-resourced.

“This work has further strengthened our understanding of the many nuances and challenges of resourcing stewardship – even as the industry increasingly recognises stewardship not merely as a necessary function but as a system-level and value-adding feature.

“We look forward to feedback from across the global investment industry on next steps and many future discussions on implementing these findings.”

This work is seemingly already creating change in the industry, as The People’s Pension head of responsible investment, Leanne Clements, said that the work being done in this area fuelled the scheme’s decision to introduce a minimum requirement for managers to have a suitable commitment to adequate stewardship resourcing above their peers.

“In introducing this new requirement, we are requiring managers to put their resources where their stewardship ambitions are,” she added.

“The report also highlights the importance of industry working groups, which we also have as a fund manager expectation.”

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