This report presents the findings of the Pensions and Lifetime Savings Association’s annual survey of pension funds engagement with investee companies and their approach to responsible investment and stewardship. The core findings of this year’s Engagement Survey include:

• An overwhelming and growing majority of pension funds accept their stewardship responsibilities and agree that Environmental, Social and Governance (ESG) factors are material to their investment decisions. 98% of respondents said that pension funds have stewardship responsibilities while 93% said ESG factors were material, up from 81% in 2013
• 94% of respondents said stewardship that considerations contribute to their selection of asset managers. 68% set out specific stewardship responsibilities in their mandates for selected managers
• 66% agreed that institutional investors were ‘active enough’ stewards of investee companies, but only 8% strongly agreed. Similarly, 81% said that they were satisfied with their asset managers reporting, but only 9% were ‘very satisfied’. 

The findings suggest that high profile responsible investment campaigns and major ESG failures, such as the Volkswagen emissions cheating scandal, have brought stewardship to the fore in recent years. However, more remains to be done to fully integrate stewardship and ESG into investment practices.

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