The Thinking Ahead Institute (TAI) has been selected by the Principles for Responsible Investment (PRI) to assist it in researching and assessing the appropriate level of resources that institutional investors should be prepared to dedicate to stewardship.

As reported by our sister publication, European Pensions, the joint global project will embark on an institutional benchmarking study to better understand current stewardship practices, resourcing requirements, and other key costs.

The subsequent guidance will include examples of best practice stewardship by asset owners and managers, and how their activity is monitored, measured, and disclosed.

Furthermore, it will propose a calculation methodology to estimate appropriate levels of resources that investors should be prepared to dedicate to both direct and market stewardship activities, with the aim of enabling them to have a real-world impact.

The project will involve interested industry participants of varying size and asset class, and is expected to be completed in July 2023.

TAI co-head, Marisa Hall, stated that the investment industry was at a “pivotal moment” in determining its role in shaping future economies, societies, and the environment.

“We are very excited to be working in partnership with PRI, our membership at the TAI and other engaged investors to set industry guidance for investors on stewardship resources,” she continued.

“This is an important project aimed at encouraging positive behavioural change and increasing stewardship resources commensurate with rising systemic risks.

“Robust and well-resourced stewardship practices are vital to ensuring that investors are able to maximise overall long-term value. It also strongly aligns with our mission in the institute to mobilise capital for a sustainable future.”

PRI director of stewardship, Paul Chandler, added: "The PRI welcomes the opportunity to work with the TAI on stewardship resourcing.

“Effective stewardship relies on good practice but also on the having the right level of capacity in place to make progress.

“As responsible investors grapple with ever greater threats from systemic sustainability issues, we look forward to working with the institute and with our signatories to help the industry better understand what the right level of resourcing is to protect long-term returns."

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