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How tech can transform stewardship oversight for asset owners

Our Wednesday Wisdom webinar explored how tech can make stewardship more efficient, transparent and impactful.

Stewardship ain’t what it used to be

Asset owners are overwhelmed by data. Stewardship is no longer as simple as having a conversation with a portfolio company or voting at an AGM. It involves a complex web of stakeholders, systems, and data points. It requires more from asset owners than ever before – more oversight, more reporting, and more clarity. But how do you achieve that?

As Mais Callan, Co-Founder and CEO of Impactive Tech, pointed out in our latest Wednesday Wisdom seminar, technology could hold the key. From AI to cloud-based platforms, the right tools can make stewardship more efficient, transparent, and impactful.

The stewardship struggle: a fragmented and overwhelming system

Asset owners face a dizzying array of stewardship challenges: managing multiple spreadsheets, dealing with siloed systems, and coordinating with asset managers and consultants. The result? Overwhelm.

On top of this, regulatory requirements have increased. Asset owners are expected to move beyond being passive onlookers. They must now set stewardship agendas and hold their asset managers accountable. But this accountability demands data – timely, detailed, decision-useful data.

At the same time, reporting is more complex. Asset owners not only need to tell their own story but incorporate the stewardship activities of multiple asset managers into one coherent narrative. And crucially, they need to avoid greenwashing – a risk not just in their own narrative but in the data they receive from others.

The stewardship solution: harnessing technology for transparency and efficiency

So how do asset owners close these gaps and make stewardship work for them? According to Mais, the answer lies in technology.

Cloud-based platforms and software-as-a-service (SaaS) solutions are transforming stewardship oversight. These tools can help asset owners standardise data across different asset managers, monitor alignment with voting and engagement policies, and streamline reporting processes. They allow asset owners to access real-time, detailed information, eliminating delays and inefficiencies.

What’s more, these platforms are user-friendly, designed to make data extraction and analysis simpler and quicker. They eliminate the reliance on outdated legacy systems, helping asset owners to focus on making decisions instead of wrangling data.

The role of AI in stewardship

While still in its infancy within asset management, AI is beginning to play a role in stewardship. Currently, AI is being used to sift through vast amounts of data, making it easier for asset owners to extract meaningful insights. But Mais believes the potential is much greater. In the near future, AI will act as a co-pilot for asset owners, helping them manage stewardship more effectively and providing the timely data they need to make informed decisions.

Key actions for asset owners

To harness the full power of technology, asset owners need to take action. Here’s how Mais suggests they get started:

  1. Set clear expectations: Asset owners must be explicit about their data needs in their mandates with asset managers. This includes asking for more granular data, even if it feels uncomfortable for managers to share.
  2. Build trust: Sharing stewardship data needs to be based on trust. Asset managers need to feel confident that their dialogue with companies will be used responsibly and not misinterpreted.
  3. Move quickly: Delaying decisions around adopting technology puts asset owners at risk of falling behind. The longer they wait, the more difficult it becomes to keep up with regulatory demands and shifting market expectations.
  4. Embrace innovation: Financial services are often slow to innovate, but now is the time for asset owners to catch up. By adopting the latest technologies, they can revolutionise their stewardship processes and set new standards for the future.

A call to action: join the stewardship pioneers

Not many asset owners have adopted digital platforms yet, but those who have are poised to lead the way. As Mais says, ‘We’re looking for the pioneers of the future’. Those who embrace change now will set the standard for tomorrow’s stewardship. The future is here, and it’s digital.