Nordic investors have a strong track record in the exercise of the integration of sustainability factors into investing, recognising that active ownership and stewardship can serve as an effective means to monitor and engage with investments on material and salient issues that relate to their performance (financial and sustainability alike).
Arguably this perspective is not shared across markets though.
The Growth of Active Ownership across Markets
Globally, active ownership has increasingly been seen as one of the most promising levers and opportunities in responsible investing to support sustainable value creation. With an updated review of sustainable investment underway, consider the last biennial review of sustainable investment conducted by the Global Sustainable Investment Alliance (GSIA) in 2022, which found, for the first time, that the most common sustainable investment strategy globally was “corporate engagement and shareholder action”.
However, more recently, the increasingly polarising public discourse on the objectives and purpose of these efforts have seen active ownership and stewardship entering a more complex era. With critics questioning the relevance and challenging the legitimacy of shareholder efforts, there is a need for investors to navigate and affirm their approach to exercising their ownership rights.
To reiterate, active ownership offers investors an opportunity to support investments in their management of material factors that impact their performance and to contribute to sustainable practices that support resilience. As recognised in the EU, it is also considered to be part of the exercise of their fiduciary duty to monitor investment performance and serves, alongside other investment strategies, as a means to take informed decisions on investments.
Navigating the Complexity
Investors that exercise stewardship have a well-stocked toolbox at their disposal — from direct bilateral engagement with issuers, voting at general meetings, filing shareholder proposals, involvement in investor statements, shareholder class action to even board representation. With the appropriateness and relevance of the tools utilised, guided by the nature of ownership type, the degree of influence that can be exercised and the market practice or familiarity of the given investment to the approach. For example, consider the difference in the investment cycle, focus and strategy between public equity as opposed to other asset classes.
However, in today’s climate, the intent, approach and transparency on the adoption of a given tool from the proverbial stewardship toolbox matters. In the face of ESG sceptics and detractors, investors need to be transparent on the objectives of their efforts. Namely, how active ownership can serve to inform decisions on existing or prospective investments and to elaborate on how their exercise of stewardship is not about ideology but value creation, which meets the preferences and demands of their constituents or clients.
Summary
In short, the current sustainable investment landscape requires a more thoughtful and transparent approach, outlining the objectives and intention of stewardship activities. And for active ownership to continue to serve as a cornerstone for responsible investing, investors need to demonstrate how we are seeking to support our investments and serve our stakeholders (clients and society alike).
Oshni Arachchi
Head of Active Ownership, Head of Responsible Investment (Sweden), Danske Bank
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This article is related to the Finsif event on active ownership held in August 2025, and after the event you can find materials from the event in the member section of our website.
