The need for an improvement in management or oversight warrants attention.
In the realm of responsible investment, a growing challenge lies in the fragmented and opaque nature of stewardship. Reports of engagements often go unread, outcomes are seldom verified, leading to a fractured feedback loop (1). To meet the challenges of climate change, inequality, and governance failures, stewardship must become more structured and scalable (2).
Despite successes in certain engagements, much stewardship remains frustratingly opaque (3). The industry is drowning in unstructured data and starving for synthesis. The average stewardship professional is now expected to cover engagement with over 100 companies per year, a figure that more than doubled in just 12 months (4). Half of investment managers report no dedicated stewardship or engagement staff (5).
To address these challenges, stewardship needs shared infrastructure, AI technology, clear accountability, collaboration, and modernized systems. Technology and infrastructure modernization can improve responsible investment engagement by replacing legacy systems with secure, flexible digital platforms that enable real-time data sharing, coordinated monitoring, and advanced analytics (5, 1).
Modernization supports efficiency by automating routine tasks and reducing costs tied to outdated IT, which often slows decision-making and increases risk due to security vulnerabilities (1). Enhanced coordination arises from integrated digital tools that align multiple actors—investors, regulators, companies—around shared sustainability standards and key performance indicators (KPIs), fostering ecosystem-wide collaboration essential for scaling sustainable infrastructure investments (2).
Artificial Intelligence (AI) and data analytics significantly boost effectiveness by improving risk analysis, enabling scenario modeling, and enhancing transparency in ESG (Environmental, Social, Governance) data, which helps investors make informed decisions and regulators evaluate sustainability claims effectively (3, 4, 5). AI adoption in asset management streamlines processes, aligns technology with investment objectives, and enhances usability, which are all crucial for impactful responsible investment engagement (5).
Recently, Impactive Tech launched its Stewardship Intelligence tool, designed to centralise and structure public engagement activity across the investment ecosystem (6). This tool aims to provide answers to the five basic questions that investors need to be able to answer: Who else has engaged this company on this issue? Has the company responded or made a public commitment? What additional value can our engagement bring? Is there a collaborative effort we can join, rather than acting alone? What's the company's track record on responsiveness? (7).
Without better infrastructure, companies tune out, investors duplicate efforts, and regulators may respond with requirements for more standardized reporting that may miss the real issues (8). To be truly effective, investors need to foster cross-sector digital collaboration aligned with standardized KPIs and sustainable finance tools (1, 2, 3, 4, 5). The future of stewardship lies in smarter workflows, better feedback loops, and systems that turn intention into intelligence (9).
In conclusion, modernizing technology infrastructure for responsible investment engagement involves migrating to cloud-based, secure, and modular digital systems, applying AI for better data-driven governance, and fostering cross-sector digital collaboration aligned with standardized KPIs and sustainable finance tools. This approach enhances the efficiency, coordination, and effectiveness of governance and sustainability issue engagement (1, 2, 3, 4, 5).
- To combat inefficiency and fragmentation in stewardship, the integration of AI technology and modernized digital systems within the business sector of finance would help establish more structured and scaleable approaches.
- The complexity in contemporary stewardship necessitates a collaborative effort by investment managers, regulators, and companies, utilizing shared technology infrastructure and standardized key performance indicators in order to ensure a more transparent and sustainable business environment.
