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Al Gore’s Generation to audit engagement and voting

Boutique considers including info in annual Assurance Report

Generation Investment Management, the sustainable fund boutique co-founded by Al Gore, is considering having its engagement with companies and its proxy voting audited by a third party firm.

The firm, formed in 2004 by former US Vice President Gore and former Goldman Sachs Asset Management Chief Executive David Blood, is looking at how to review the activities in its annual assurance report.

“We are in discussions with our auditors on how to include a review of our engagement and voting processes into our annual Assurance Report on Internal Controls (AAF 01/06),” London-based Generation says in its submission to the UK’s new Stewardship Code.

Under UK accounting guidelines, investment management, custody and pension administration providers report against a technical standard known as AAF 01/06. This was introduced, with input from bodies like the National Association of Pension Funds and service providers, in 2006. The NAPF, in its new guidance on the Code, says AAF 01/06 can be useful in auditing engagement and voting.
It is encouraging pension funds to request suchreports from their asset managers and to use them as part of the evaluation process.

The move comes as the Trades Union Congress, the UK’s umbrella union body, has found that it is “impossible” to compare investors’ voting data as there are wide variations in how frequently their voting data is updated and the length of time it is available on websites.
The body says the inconsistent quality of this publicly available data shows that the voluntary approach to voting disclosure has failed, and mandatory disclosure of voting records is now needed.
The TUC’s eighth annual fund manager voting survey this month found that a minority of institutional investors supported over 70% of all management resolutions while a minority supported less than 40%.
It analysed the voting records of more than 20 fund managers and pension funds between July 2008 and December 2009. Remuneration was the most popular issue for investor dissent, with the majority of investors supporting less than a third of remuneration reports. Link to TUC Survey