• AIQ - The Macro Stewardship Edition
  • Macro Stewardship
  • ESG

Macro stewardship: An introduction

In an introduction to this special edition of AIQ, Steve Waygood explains why it’s time for a more ambitious approach to stewardship.

The investment industry is currently dominated by three letters: E, S, and G. Yet for all the attention, a backlash is building. This is not all bad, though. Amidst all the grand claims and grandstanding, greater scrutiny of responsible investing is welcome.

A pragmatic response to challenge is to listen – and up your game where critics have a point. Neatly packaging up morals and ethics into investments is fraught with danger; communication and transparency are key. But we also need to be far more ambitious, creating new paradigms and goals for the economic and financial systems we have haphazardly created.

This special edition of AIQ explores the world of macro stewardship – the idea market participants have a responsibility to help preserve the integrity of the whole financial system, keeping it in healthy service of society and the planet. This should be done by engaging with regulators, policymakers and many other changemakers. It is complementary to the more familiar practice of micro stewardship, which focuses on engagement with companies and issuers.

Macro-level reform requires systems-level thinking – an ability to step outside of your narrow purview and see as much of the ‘whole’ as possible. It requires an understanding that every system has leverage points where targeted interventions can have an outsized impact.

In this edition, our CEO Mark Versey clarifies what we mean by macro stewardship, and draws out the key concepts and practical tools for making it work. I consider why a narrowness in perception has led us to collectively overlook sustainability in markets and economics. We look at what it means to take a systems-led approach to problem solving and interview some of the leading thinkers on the subject, including Nigel Topping and Kate Raworth.

We also challenge financial market theory and lay down an ambitious gauntlet of moving towards a sustainable market hypothesis. Last, but by no means least, Abigail Herron looks at the dangers of ESG burnout and fatigue among practitioners.

Having worked in responsible investing for over three decades, I can’t deny there have been moments where I was close to losing faith in the cause. That was then, this is now. I am excited and hopeful we can move towards a sustainable financial system capable of supporting the needs of everyone without destroying the planet and its natural ecosystems.

My team has an unofficial motto: “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has.” Margaret Mead reminds us however small and inconsequential we may feel at times, we can all make a difference and change things for the better.

I hope you enjoy the issue.

Steve Waygood
Chief Responsible Investment Officer
Aviva Investors

AIQ: The Macro Stewardship Edition

In this edition of AIQ, we give a primer on the next frontier of responsible investing - macro stewardship - where engagement moves beyond companies to focus on reforming systems.

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