With great power comes great responsibility

Duty of ownership working group paper

The Duty of Ownership working group wished this paper to include high-level principles and beliefs that cover the substantive issues below. With the aim to provide guidance to assist organisations in their sustainable investing policies and practices in a way that can easily be socialised and the knowledge easily transferred:

  • How the ownership responsibility (and opportunity) that is carried by asset owners and asset managers involves a fiduciary duty of loyalty both in the financial and ESG context and in a member/stakeholder context. We considered how the changing interpretation of fiduciary duty is affecting and will affect institutional investors.
  • Asset ownership involves the exercise of rights and responsibilities in voting, engagement and shareholder resolutions. We considered how effectively these functions are performed and ways for these functions to be improved
  • There is a society-wide change taking place, with the world transitioning to a low-carbon economy, while simultaneously adapting to other societal and environmental pressures. We considered what part institutional investors are playing, could be playing and should be playing in this transition. We explored the mandates that asset owners and asset managers might design and manage to produce positive impacts on the economy, the environment and society within the constraints of fiduciary duty and of maximising risk-adjusted return.

Listen to related podcast series
Episode 1: Fiduciary duty and sustainable investing

The returns our members need can only come from a system that works. And so we’re going to work on the system, and we’re big enough to make a difference

Roger Urwin brings our Duty of Ownership paper to life in this twenty-minute presentation to leading financial services companies.