About this report

The 2022 report Engage, Advocate, Collaborate: Unpacking Stewardship in Australasia was published by the Responsible Investment Association Australasia (RIAA) with research support from KPMG. It analyses stewardship practices across Australia and Aotearoa New Zealand, based on a survey of over 70 investors, 24 interviews, and a review of global stewardship codes, academic literature, and policies. It aims to clarify how investors are embedding stewardship into responsible investment frameworks to achieve long-term sustainable outcomes.

Introduction

Stewardship is defined as the responsible allocation and management of capital to create and preserve long-term value for current and future generations. It includes active ownership, corporate engagement, collaboration, and policy advocacy. In Australia, assets managed using engagement and shareholder action increased by 54% between 2020 and 2021, totalling AUD 726 billion, while in Aotearoa New Zealand growth reached 9%, totalling NZD 167 billion. Stewardship is increasingly recognised as part of fiduciary duty, linking financial performance to environmental, social, and governance (ESG) outcomes.

Stewardship codes, standards, and guidelines

Half of surveyed investors (51%) have adopted stewardship codes, the most common being the UK Stewardship Code (26%), the Australian Asset Owner Stewardship Code (15%), and the International Corporate Governance Network (ICGN) Global Stewardship Principles (15%). These codes emphasise accountability, disclosure, and monitoring. New codes, such as the Stewardship Code Aotearoa New Zealand (2022), integrate local principles including Māori values and intergenerational focus. Stewardship codes increasingly embed ESG requirements to manage systemic risks such as climate change.

Purpose and goal of stewardship

The goals of stewardship include improving ESG disclosure and outcomes, enhancing long-term value creation, and managing risk. While stewardship codes emphasise sustainable outcomes and systemic change, investors often focus on financial returns and performance. The UN Principles for Responsible Investment’s Active Ownership 2.0 encourages investors to prioritise real-world outcomes, collective goals, and collaboration over competitive or purely financial motivations.

Stewardship framework

Three stewardship approaches are identified: proactive, strategic, and reactive.

• Proactive stewardship targets ESG issues that are financially material to an asset or portfolio.
• Strategic stewardship sets organisational ESG priorities, aligning engagement with systemic issues such as climate change or modern slavery.
• Reactive stewardship responds to controversies or incidents, such as the Juukan Gorge destruction or Christchurch terrorist attack, often prompting broader thematic action.
  Most investors (82%) collaborate to achieve ESG outcomes, 81% exercise voting rights, and 71% engage or advocate on public policy issues. Voting and engagement are core tools, with proxy voting commonly used but increasingly managed internally.

A Conceptual model of stewardship

The model positions asset owners, investment managers, and service providers as key actors. Asset owners establish stewardship mandates and monitor outcomes, while managers execute engagements and voting. Civil society organisations also shape priorities through advocacy. Stewardship activities are supported by collaborative initiatives including Climate Action 100+, the Net Zero Asset Owner Alliance, and the Investor Group on Climate Change.

Current trends in stewardship practice

Climate change (83%), diversity and inclusion (69%), and human rights (68%) are the top engagement topics. Around 85% of investors publicly disclose stewardship policies, and 73% report on engagement activities and outcomes. Most monitor voting (80%) and engagement effectiveness (77%), although only 55% assess whether duties have been met. Financial materiality remains the dominant framework, but awareness of “double materiality” is growing. Reporting practices vary, with 58% publishing full voting reports and 51% releasing engagement summaries.

Barriers to effective stewardship

Key barriers include structural limitations (67%), lack of resources and capacity (63%), skills gaps (63%), and accountability concerns (54%). Free rider issues, unclear attribution of impact, and insufficient incentives hinder collective action. Interviewees highlighted the need for more expertise, integration of ESG specialists with investment teams, and prioritisation of quality over volume in engagements.

The future of stewardship

Stewardship is expanding as a mechanism for long-term value creation and systemic change. Education initiatives such as the Stewardship Professionals program aim to build capability. The report anticipates increased use of stewardship to address systemic challenges like climate change, with greater focus on measurable, system-wide outcomes and improved transparency to maintain community confidence.