Chapter 08 · Finance, data & evidenceSustainable Finance & Investment
Stewardship
Definition
The responsible care, use and governance of resources and relationships so their ecological and social value is maintained or improved over time.
References
This reference provides supporting context for how “Stewardship” is defined and used.
Overview
“Stewardship begins where legal control ends: with responsibility for consequences that may be distant, shared or inherited. ”
Stewardship is an old idea with modern appeal. It appears in discussions of water, forests, soils, investment, data and supply chains. The word suggests care rather than extraction and responsibility rather than ownership. Yet its warmth can hide a basic question: who is entitled to act as steward, on whose behalf and with what accountability?
Nathan Bennett and colleagues define local environmental stewardship as actions taken by individuals, groups or networks to protect, care for or responsibly use the environment in pursuit of environmental or social outcomes. Their formulation is useful because it treats stewardship as action within a social-ecological context, not as a moral label attached to an organisation.
Stewardship is broader than efficient management. A company may use water efficiently within its factory while contributing to depletion of the basin.
A landowner may maintain tree cover while excluding customary users. A buyer may promote soil practices while transferring costs and risk to farmers. Stewardship asks whether decisions protect the resource and the relationships through which it is governed. Community forest research shows why rights and institutions matter.
Studies of forest commons across multiple countries have found that local participation in rule-making and meaningful management authority can support both ecological condition and livelihood benefits. The lesson is not that every community arrangement succeeds. It is that stewardship capacity depends on rights, knowledge, incentives, trust and the ability to enforce rules, not only on technical guidance.
Nepal’s community forestry programme makes the issue concrete.
Forest user groups have managed substantial areas under locally developed rules, often improving forest condition and creating community funds. Research also documents unequal participation and benefit distribution, including barriers faced by poorer households, women and marginalised groups. Stewardship can produce public value while still reproducing local power imbalances.
The governance design remains part of the outcome. Corporate stewardship claims require the same scrutiny. Describing a company as a steward of a landscape does not grant it authority over land, water or community priorities.
Businesses can support stewardship through purchasing practices, finance, data, restoration and collaboration, but they cannot replace public governance or the rights of Indigenous Peoples and local communities. Care without consent can become paternalism.
Time is central. Stewardship considers consequences beyond the current budget, management team or harvest. Soil organic matter, aquifer recharge, forest structure and institutional trust can take years to build and moments to damage. A short-term improvement that increases future vulnerability is poor stewardship even if it satisfies the current target. Stewardship also implies restraint.
Not every available resource should be used to its maximum sustainable yield, especially where thresholds are uncertain or climate change is altering the system. Maintaining buffers, diversity and options for future users may require leaving some value unextracted today. Accountability distinguishes stewardship from good intention.
The steward should be able to explain the resource or relationship being cared for, the rights involved, the desired condition, the evidence used, the trade-offs made and the people able to challenge the decision. Without those elements, stewardship becomes a claim about character rather than a system of responsibility. This is particularly important in supply chains.
A company may not own the farms, forests or watersheds on which it depends, but its standards, prices, timelines and purchasing decisions influence them. Stewardship means recognising those dependencies and impacts, supporting local agency and accepting obligations that extend beyond the transaction. The strongest stewardship models therefore combine care, competence, rights and long-term accountability.
They neither romanticise local practice nor assume that distant institutions know best.
They create conditions in which those closest to a resource can govern it fairly, while those who benefit from it contribute proportionately to its protection.
Practical application
Define the object of stewardship and the rights attached to it. Identify who uses, governs, depends on and bears risk from the resource. Establish the desired long-term condition, ecological or social thresholds and the decision rights of affected groups. For a company, test whether procurement, finance and performance incentives reinforce or undermine that condition.
Measure not only resource efficiency but distribution of costs, participation in decisions and the durability of the underlying system.
Why it matters
Many sustainability challenges concern shared resources that no single actor owns or controls. Stewardship provides a language for responsibility across boundaries and generations, but only when it is grounded in rights, evidence and accountable governance.
Common misconception
Stewardship is often presented as responsible management by a benevolent owner. Ownership does not guarantee stewardship, and stewardship does not create ownership. Legitimate practice must recognise existing rights, affected people and the limits of the steward’s authority.
Connections
Continuous improvement strengthens the recurring management discipline that stewardship requires. Landscape approaches coordinate stewardship across multiple actors and land uses. The next chapters test stewardship against forests, beginning with the distinction between deforestation and forest degradation.
A question worth asking
When your organisation calls itself a steward, who has the power to decide whether it has fulfilled that responsibility?
Selected references
Bennett, N. J. et al. 2018. Environmental Stewardship: A Conceptual Review and Analytical Framework. Environmental Management 61: 597-614. Ostrom, E. 1990. Governing the Commons: The Evolution of Institutions for Collective Action. Chhatre, A. and Agrawal, A. 2009. Trade-offs and Synergies between Carbon Storage and Livelihood Benefits from Forest Commons.
Proceedings of the National Academy of Sciences 106(42): 17667-17670. Agrawal, A. and Chhatre, A. 2006. Explaining Success on the Commons: Community Forest Governance in the Indian Himalaya. World Development 34(1): 149-166. Nightingale, A. J. 2006. The Nature of Gender: Work, Gender, and Environment. Environment and Planning D 24(2): 165-185.
The terms through which organisations describe, manage and account for their relationship with the living world.
How it is used
In professional practice, “Stewardship” helps investors, lenders, analysts, data providers and sustainability teams describe or assess the responsible care, use and governance of resources and relationships so their ecological and social value is maintained or improved over time. It is commonly encountered in capital allocation, risk assessment, measurement, valuation, due diligence and performance analysis.
A credible application identifies the calculation method, data provenance, assumptions, boundary and decision purpose.