Share Action

Conclusions and recommendations



The asset management industry needs to change urgently if it is to demonstrate proactive stewardship that safeguards against key social and environmental risks in the best interests of the investors.

Currently, some asset managers demonstrate leadership in particular areas, but only a very small number are performing strongly across all the topics included in our survey. Though it is encouraging to see some asset managers improving, too many still need to substantially improve their policies and practices. Most only offer a tiny proportion of strategies with sustainability labels instead of embedding responsible investment practices across their portfolios. This ‘business as usual’ approach is insufficient to drive the change needed to match the scale and urgency of the environmental and social crises we face.

In the coming months, we will release reports reviewing asset managers’ performances in greater detail on the topics of stewardship and governance, climate, biodiversity, and social issues.


These recommendations broadly cover asset managers’ overall responsible investment policies and practices. We will make further specific recommendations in our forthcoming thematic reports.

Recommendations for asset managers

We encourage asset managers to use the rankings and findings in this and our forthcoming series of reports to benchmark their own performance and drive the improvements needed. We will also provide asset managers with resources and tailored recommendations to make progress and we will constructively engage with them to achieve this. We recommend these actions:

  • Identify, manage and report on the real-world impacts of investment decisions on sustainability issues, including climate, biodiversity, and social issues.
  • Strengthen dedicated responsible investment policies by explicitly covering climate, biodiversity, and social issues and by making ambitious commitments, such as setting net-zero targets and developing transition plans to align all portfolios with the goals of the Paris Agreement and a 1.5C scenario.
  • For passive asset managers, focus on directing inflows of capital towards funds which align with the goals of responsible investment, through investor education and the creation of new products via appropriate index selection; and engage with index providers to develop new indices where necessary.
  • Use proactive stewardship to foster positive change by engaging with investee companies and exercising voting rights on responsible investment issues. Passive managers have a particularly high burden of responsibility for stewardship due to the limited influence they can have via capital allocation.
  • For asset managers heavily exposed to fixed income, ensure that company engagement with issuers of corporate debt is aligned with responsible investment policies.

Recommendations for asset owners

Asset owners and their beneficiaries have the most to lose from inaction on the themes covered by this report. The wide-reaching and systemic nature of the associated risks mean that it is not possible to avoid them simply through diversification or divestment. Asset owners should use their influence to hold asset managers to account on these risks. We recommend these actions:

  • Strengthen due diligence of asset manager selection by reviewing responsible investment performance and real-world impact, using this report and our detailed thematic reports.
  • Firmly embed clear and specific expectations on the integration and reporting of climate, biodiversity and social issues into Investment Management Agreements.
  • Require asset managers to regularly report on how responsible investment issues are being managed at all stages of the investment process, and include case studies.
  • End relationships with asset managers who do not live up to set expectations on managing responsible investment issues.
  • Asset owners who are also shareholders in asset management companies should use their shareholder influence via voting and/or engagement to address poor performance on responsible investment issues.

Recommendations for policy makers

Regulation is a powerful way to raise minimum standards across an industry. The development of sustainable finance legislation across Europe is likely contributing to the higher ratings attained by European asset managers in our survey. The EU’s Sustainable Finance Disclosure Regulation (SFDR), which came into force in 2021, lays down requirements for investors to disclose their adverse impacts on people and planet, playing an important role in improving transparency. Meanwhile, the UK Stewardship Code 2020 has helped improve stewardship by UK investors, according to a November 2022 report by the Financial Reporting Council[i]. However, these requirements are not without their shortcomings, and inconsistencies in their application can create challenges for investors[ii]. We recommend these actions:

  • Introduce mandatory reporting in line with the Task Force on Climate-related Financial Disclosures (TCFD)[iii] recommendations and work with the asset management, and the wider investment industry, to develop guidance to help with implementation.
  • Develop and enforce strong, mandatory stewardship rules covering asset owners, asset managers and service providers that cover responsible investment factors as well as engagement, disclosure, and voting[1].
  • Empower regulators with clear mandates to supervise and, where necessary, penalise performance on responsible investment practices, such as responsible investment policies, sustainability disclosures, and stewardship.
  • Mandate voting disclosure by institutional investors, including setting a compulsory timeframe, and work with industry to develop guidance for what good voting disclosure looks like.
  • Ensure that regulation requires granular disclosure and integration of responsible investment risk and impacts beyond climate, including biodiversity and human and labour rights.
  • Move away from legislation which frames responsible investment factors as relevant only as a material financial risk to portfolios towards legislation which addresses the impact investment has on the environment and society.
  • Provide clarity that market abuse rules and anti-trust rules will not apply to institutional investors when they conduct collaborative engagement activities relating to sustainability issues like climate change.

Recommendations for investment consultants

Investment consultants often act as a critical link between asset owners and the asset managers they recommend. To help match their clients with the most suitable asset managers, investment consultants need to be acutely aware of how asset managers perform on responsible investment issues such as climate, biodiversity, and social issues across their investment practices. We recommend these actions:

  • Regularly meet with recommended asset managers to ensure up-to-date awareness of how responsible investment issues are meaningfully integrated.
  • Challenge asset managers directly where performance on responsible investment issues is substandard.
  • Do not recommend asset managers to clients if their performance on the topics covered in this report is insufficient.
  • Encourage asset managers to improve both performance and disclosure on the topics covered in this report.


[1] Our recommendations to the EU Shareholder rights directive may be found at:


[i] Financial Reporting Council (2022). Review of Stewardship Reporting 2022. Available online at:

[ii] Dawson, C. (4 January 2023). “SFDR Level 2 standards go live after string of Article 9 downgrades”. ESG Clarity. Available online at:

[iii] Task Force on Climate-related Financial Disclosures (2017). Recommendations of the Task Force on Climate-related Financial Disclosures. Available online at:

All links accessed January 2023.