How LGT’s stewardship approach helps navigate risk, drive progress and protect long-term value.
As economic, environmental and geopolitical shocks continue to test global markets, the capability of companies to withstand disruption and adapt to change has never been more important. For long-term investors, building and maintaining resilience is not optional. It is essential.
As discretionary investment managers, we are long-term stewards of the money our clients have entrusted to us. Reflective of our long-term thinking and client-centric focus, stewardship plays a vital role in our processes. At LGT, we view stewardship as a practical tool for identifying vulnerabilities, strengthening business models and supporting long-term value creation. We recognise that the health of the economy relies on a healthy planet and healthy people and, through active stewardship, we can maximise risk-adjusted returns and generate positive real-world impact.
By actively engaging with companies and fund managers, we seek to understand how they are preparing for the future and where we can encourage progress that supports more stable outcomes over time. Thus, ensuring that decisions and recommendations are taken with our clients’ best interests in mind.
Yet just as the need for resilience intensifies, support for environmental and social (E&S) shareholder proposals is falling. In 2024, average support dropped to 16%, down from 19% in 2023 and 28% in 2022.1 The decline is sharpest among the largest asset managers.
This shift reveals a growing disconnect between what many asset managers say matters, like climate action or supply chain ethics, and how they vote when it counts. It also raises valid questions about whether stewardship efforts are truly aligned with long-term priorities.
At LGT, our approach is more consistent. We see stewardship as central to our duty to clients—helping protect and grow your capital over time—while also supporting a more stable, sustainable future. Resilience is the thread that ties these goals together. It means backing companies that are well positioned to manage change, navigate risk and deliver lasting value.
Engagement with stakeholders is central to our approach. Through ongoing dialogue with investee companies, fund managers and other stakeholders, we aim to identify material ESG issues, promote stronger governance and support practices that enhance resilience. Some engagements are proactive, addressing emerging risks or opportunities. Others are reactive, prompted by specific concerns or performance issues. In every case, the goal is to support long-term outcomes.
Our 2024 Stewardship Report, published this week, illustrates how we put this approach into practice—detailing our engagement activity, collaborative efforts, escalation actions and oversight of external managers.
One example from our portfolio and highlighted within the report is our engagement with AstraZeneca on biodiversity assessment frameworks. The dialogue focused on how the company identifies and manages nature-related risks—such as deforestation and water pollution—that could disrupt supply chains and affect access to key ingredients. By encouraging greater transparency and integration of evolving reporting standards, the engagement supported AstraZeneca’s efforts to manage environmental risks and reinforce operational resilience.
While voting on shareholder proposals is just one part of stewardship, it remains a powerful signal for broader sentiments.
The drop in support for E&S resolutions suggests a shift in how some investors are approaching sustainability, even as real-world risks accelerate. For us, this only reinforces the need for a clear, consistent and credible stewardship approach.
As the 2024 report shows, stewardship remains a central part of how we at LGT invest—actively, thoughtfully and with a focus on building long-term resilience.
In today’s rapidly changing world, the resilience of companies to navigate economic, environmental, and geopolitical disruptions is more important than ever—especially for long-term investors. At LGT, we recognise that maintaining this resilience is not just a strategy but a necessity for protecting and growing your capital over time and for generations to come. Our commitment to thoughtful, long-term stewardship is central to how we manage your investments, working to support both your financial success and a sustainable future.
Read more in our Stewardship Report 2024.
[1] Morningstar: https://www.morningstar.com/sustainable-investing/proxy-voting-sustainability-big-three-hold-key
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