system stewardship theory
System stewardship deprioritizes individual company returns and empowers institutional investors to optimize portfolio returns for their beneficiaries and clients. Only this approach can preserve the long-term value of the diversified portfolios held by pension funds, foundations, endowments, and other institutions working on behalf of everyday savers.
Investors have already developed highly effective tools to press companies to optimize their returns. These tools include environmental, social, and governance engagement designed to increase returns and decrease enterprise risk at individual companies. System stewardship expands the use of these tools to ensure that companies protect their diversified shareholders’ interests by appropriately prioritizing systemic health over individual company returns.
Certain elements are essential to system stewardship: a legal foundation, an economic foundation, a clear internal mandate, external mandates, and stewardship practices. We provide open-source resources to satisfy each element. This suite of tools provides institutional investors with principles to adopt and follow throughout the organization, references to important legal guidance, specific language for proxy-voting guidelines, advisor mandates, and other materials that provide a turnkey solution investors can easily customize.
tsc and system stewardship
closing the engagement gap: climate change and antimicrobial resistance
The Shareholder Commons released two case studies on issues critical to shareholders advocating for improved social and environmental performance from companies: climate change and antimicrobial resistance (AMR).
The case studies show that shareholders must reject the conventional assumption that shareholder advocacy should be limited to actions intended to increase a company’s enterprise value.
Watch our webinar below to learn more about these case studies and for an introduction to our guardrail project.
System stewardship tools
the shareholder commons blog
universal ownership in the Anthropocene
For a better understanding of the theoretical and practical framework of universal ownership theory: Dr. Ellen Quigley, Universal Ownership in the Anthropocene.
A Legal Framework for impact
The recent report from the law firm Freshfields Bruckhaus, A Legal Framework for Impact, shows that investment professionals around the world have an obligation to prioritize systemic issues. The Freshfields Report is more than 500 pages long. TSC has summarized the findings that relate to system stewardship.
The Long and Short of It: Are We Asking the Right Questions? Modern Portfolio Theory and Time Horizons
Universal Ownership: Why Environmental Externalities Matter to Institutional Investors
Toward Fair and Sustainable Capitalism
Together, we're embarking on a fundamental transformation of our financial system...