Investor stewardship in turbulent times: The case for pragmatic ambition

Whilst we get used to the views from WHEB’s new home with Foresight Group in The Shard¹, the new investment landscape we find ourselves facing is a more demanding global context for investor stewardship.

Facing a new landscape

In the last quarter, geopolitical uncertainty has intensified. The populist push-back to sustainability agendas has gained momentum, while regulatory support for sustainable investing is being rolled back in both the US and EU.

Navigating these complexities is increasingly difficult for both companies and investors, reinforcing the importance of effective stewardship. But with this challenge comes an opportunity for investors to reassess what makes engagement truly effective.

Engagement under pressure

Constructive engagement is harder where Environmental, Social and Governance (ESG) issues have become politicised. Just days into President Trump’s second term, new Executive Orders targeted diversity, equity and inclusion (DEI) programmes,². Disney is already facing an investigation³, despite 99% of its shareholders supporting its approach⁴.

The SEC has also reversed its stance on mandatory climate risk disclosures⁵ and is weakening tools like shareholder proposals⁶ and collective initiatives⁷. As a result, material information may become harder to access, just as investor appetite is growing. Support has also been withdrawn from initiatives like the Climate Action 100+ and the Net Zero Asset Manager’s Initiative (NZAMI).

These barriers aren’t new. The overturning of Roe v. Wade in 2022 similarly politicised a core workforce issue. WHEB responded by encouraging companies to protect employee wellbeing—a principle that remains as important as ever.⁸

Meanwhile, global regulation continues to evolve. In the EU, the review of the Sustainable Finance Disclosure Regulation (SFDR) could raise the bar for investor disclosures. However, persistent gaps in corporate reporting remain a major challenge. Proposed reforms to the Corporate Sustainability Reporting Directive (CSRD) — which would exclude around 80% of companies and delay implementation — risk making matters worse, just as investors need more, not less, transparency from companies.

Time for a reset: Recalibrating expectations

NZAMI’s recent decision to pause all activity, in response to signatories leaving⁹, may yet serve as a reminder that investor expectations of what engagement alone can achieve had, perhaps at times, become unrealistic.

However, challenging conditions can also create opportunity. In our view, NZAMI’s pause is more of a case of strategic recalibration, rather than outright retreat. Investor stewardship should take note and follow suit.

Pragmatic ambition for smarter stewardship

• Plays to strengths to focus on the essentials: Addressing systemic risks, such as climate change, biodiversity loss, and inequality, requires ambition. However, engagement must be strategic and context-driven. At WHEB, we prioritise objectives with measurable outcomes focused on long-term value creation. With a concentrated portfolio and long holding periods, we focus our influence where it matters most: company policy, strategy, and governance.
  Example: Smurfit WestRock’s forest exposure and limited biodiversity disclosures made it a clear engagement priority¹⁰. WHEB joined Nature Action 100 to push for better benchmarking, stronger community engagement, and clearer progress reporting¹¹.
• Knows the limits of company engagement: Not every issue can be resolved via company engagement alone. Systemic externalities, like the unpriced cost of carbon, extend beyond firm-specific action and require market and policy-level engagement. Recognising this helps investors focus where engagement has the most impact and seek broader avenues for change.
  Example: Despite sustained engagement, J.B. Hunt¹² couldn’t commit to a 1.5°C-aligned target due to systemic barriers like poor grid infrastructure and limited access to electric trucks.
• Uses systemic levers to amplify impact: Where company engagement falls short, macro stewardship is critical. This means influencing policymakers, regulators, and standard-setters, while also engaging upstream with clients and advisers¹³,¹⁴.
  Example: While WHEB has limited exposure to the causes of antimicrobial resistance (AMR), we invest in companies working to reduce its spread. Recognising the limits of firm-level action, we joined the Investor Action on AMR initiative to drive broader system-level change.

Stewardship and engagement for the long term

The landscape may be shifting, but investors’ stewardship responsibilities endure. Global market forces demand that we recalibrate how we engage, what we prioritise, and how we define success. Stewardship must be sharper, more strategic, and grounded in long-term value.

WHEB’s use of engagement targets — all based on maximising long-term impact in businesses where that impact is embedded in the product — means we’re naturally incentivised to focus on what’s material and relevant for a company’s long-term success. And that, in turn, helps us navigate the politicisation of the sustainability agenda.

The WHEB strategy remains committed to stewardship that is ambitious yet pragmatic, proving that even under pressure, meaningful engagement is not only possible, but also essential.

¹https://www.whebgroup.com/news/foresight-group-completes-acquisition-of-wheb-asset-management
² https://www.whitehouse.gov/presidential-actions/2025/01/ending-illegal-discrimination-and-restoring-merit-based-opportunity/
³ https://www.fcc.gov/sites/default/files/Carr-Letter-to-Disney-DEI-03252027.pdf
⁴ An anti-DEI shareholder proposal that challenged Disney’s parsiticaption in the Human Right’s Campaigns Corporate Equality Index – a benchmarking tool assessing corportate policies, praxctices and benefits pertinent to lesbian, gay, bisexual, transgender and queer emploees – received only 1% support https://www.reuters.com/business/media-telecom/disney-investors-reject-proposal-withdraw-hrcs-diversity-index-2025-03-20/
⁵ https://www.sec.gov/newsroom/press-releases/2025-58
⁶ The SEC rescinded Staff Legal Bulletin 14L, which had strengthened shareholder rights by limiting companies' ability to exclude ESG proposals. It reinstated earlier guidance allowing companies to exclude proposals—like climate targets—on the grounds of micromanagement. https://www.sec.gov/rules-regulations/staff-guidance/staff-legal-bulletins/shareholder-proposals-staff-legal-bulletin-no-14l-cf?
⁷ The SEC also updated guidance on Schedules 13D and 13G, potentially creating new hurdles for investors who cross the 5% ownership threshold and coordinate on ESG-related efforts, by increasing the risk of being deemed a “group” subject to disclosure. https://www.sec.gov/about/divisions-offices/division-corporation-finance/exchange-act-sections-13d-13g-regulation-13d-g-beneficial-ownership-reporting-021125#:~:text=Feb.,New%20Question%20103.12
⁸ https://www.whebgroup.com/vestas-xylem
⁹ In an effort to halt more signatories leaving, the NZAMI has suspended activities to review and ensure the initiative remains fit for purpose https://www.netzeroassetmanagers.org/update-from-the-net-zero-asset-managers-initiative/
¹⁰ Smurfit Kappa, now Smurfit WestRock, has made good progress on this topic since we first began engaging it in 2023 https://www.whebgroup.com/smurfit-kappa-engagement-case-study-q3-2023
¹¹ (Link to new case study on website – pending)
¹² WHEB redirected its focus and exited the position in J.B. Hunt in early 2024.
¹³ Full details of our public policy engagement are included in our Stewardship Report on p. 72 https://www.whebgroup.com/assets/files/uploads/20240730-wheb-asset-management-2023-stewardship-report.pdf A full list of our involvement in indisutry intiatives and assocations is available on our website: https://www.whebgroup.com/about/our-industry-networks
¹⁴ https://www.whebgroup.com/assets/files/uploads/20241030-wheb-stewardship-white-paper.pdf