19 Sep 2025
This article explores what stewardship means in practice, the approaches available to investors, and why active engagement is often the most effective way to influence company behaviour. We also outline how stewardship is applied across atomos portfolios.
Investment
This article explores what stewardship means in practice, the approaches available to investors, and why active engagement is often the most effective way to influence company behaviour. We also outline how stewardship is applied across atomos portfolios.
Investing isn’t just about deciding where to put your money — it’s also about keeping an eye on how that money is used. Stewardship means investors making an effort to hold companies accountable for their activities, and to encourage ways of working that support strong performance today and long-term value for the future.
This article explores what stewardship means in practice, the approaches available to investors, and why active engagement is often the most effective way to influence company behaviour. We also outline how stewardship is applied across atomos portfolios.
What is Stewardship in Investing?
Stewardship is about active ownership. Investors are not passive market participants; they own companies. As owners, we can try to oversee companies in order to manage risks and support resilient returns, and to engage with them where we believe improvements are needed.
Strong stewardship can:
Why does this matter? Because companies that take environmental, social and governance (ESG) considerations seriously tend to be more resilient in the long run. A recent study of UK firms found that stronger ESG performance was positively linked to improved financial outcomes and greater corporate resilience (Moussa, Elmarzouky & Shohaieb, 2024, University of St Andrews).
Poor practices, on the other hand, can lead to financial risks, reputational damage, or even regulatory penalties — consider the case of Volkswagen, which paid over $30 billion in fines and settlements after being found to have cheated emissions tests.
Engagement vs. Exclusion
When companies fall short of ESG standards, investors must decide how to respond.
Exclusion means removing a company from a portfolio based on specific ESG concerns. This avoids exposure to certain risks or business practices and ensures alignment with investor principles. While it may be seen as making a strong statement, exclusion often has limited impact on the company’s behaviour — once shares are sold, investors lose their ability to influence future decisions.
Engagement means remaining invested and using shareholder rights to influence company practices. This can involve:
For example, some investors have chosen to continue engaging with Amazon on issues such as working conditions and labour rights, rather than divesting. This has enabled them to raise concerns directly with leadership and press for incremental improvements.
Stewardship at atomos
At atomos, stewardship is an integral part of how we manage portfolios. While we use some exclusions where appropriate, we focus on constructive engagement as a tool for managing long-term risks and supporting resilient returns.
Issues like climate change, human rights, and governance are not just broader societal concerns — they also pose risks that can affect the stability of markets and, in turn, the performance of investments.
Our approach operates at several levels:
Where funds are advised by WTW, we draw on the expertise of EOS at Federated Hermes, accessed via WTW, to support this work. EOS is a leading global provider of engagement services, representing investors with over £1.5 trillion in assets.
In 2024 alone, EOS:
In 2025, EOS at Federated Hermes is focusing its stewardship on key global themes. These include the shift to electric vehicles in the automotive sector, responsible use of antibiotics in healthcare and food, stronger governance around artificial intelligence, and greater corporate transparency on tax practices. Each reflects growing investor priorities and the need for companies to manage long-term risks effectively.
EOS’s scale gives it significant influence, enabling it to drive change across industries and regions. This work directly benefits our clients’ portfolios. At atomos, we track these activities closely and review progress regularly to ensure stewardship remains central to how we manage investments. You can find more detail in our latest Engagement Report.
EOS supports investors through two main forms of stewardship:
As markets continue to evolve, stewardship remains one of the most effective tools investors have in order to protect portfolios for the long term and influence how companies prepare for the future.
Disclaimer
Any views expressed are based on information received from a variety of sources which we believe to be reliable, but are not guaranteed as to accuracy or completeness by atomos. Any expressions of opinion are subject to change without notice.
All investment views are presented for information only and are not a personal recommendation to buy or sell. Past performance is not a reliable indicator of future returns, investing involves risk and the value of investments, and the income from them, may fall as well as rise and are not guaranteed. Investors may not get back the original amount invested.
The value of investments and any income from them can fall and you may get back less than you invested.
The value of investments and any income from them can fall and you may get back less than you invested.
