Last year was quite the year for climate change shareholder resolutions, which came of age with a rapidity unseen before the proxy access movement. According to 50/50 Climate Project Executive Director Edward Kamonjoh climate resolutions are set to equal or possibly surpass proxy access votes in 2017.
The initiative is a not-for-profit centre for institutional investors focused on increasing the climate competency of corporate boards at large publicly traded corporations; Kamonjoh, formerly head of ESG research at ISS and most recently its head of US Strategic Research and Analysis, recently became its first executive director.
In preparation for the 2017 proxy season, the Project has released a survey of the key votes in 2016 summarising the most significant votes on shareholder resolutions among oil and gas and utility companies, as well as an analysis, based on data from Fund Votes, of the voting practices of the top 30 asset managers: a snapshot of their record on climate voting.
The survey aims to “to identify alignment between asset owners interested in addressing climate risk in the companies they own, and the financial firms that manage those assets.”
The climate vote survey includes an analysis of more than just ‘climate change’ resolutions, such as the ‘2-degree stress test’ resolutions, however, since it also co-opts into the campaign Say on Pay votes that have been cast against a company that has no sustainability metrics in its incentive plans, or votes against directors who are ‘climate incompetent’ (for want of a better phrase), or proxy access resolutions that would allow investors to place a climate competent director on a board.Some of the key votes the survey identifies are the 62% support for proxy access at ExxonMobil, 59% against the pay vote at BP, 49% for the ‘2-degree stress test’ resolution at Occidental, 40-56% withheld votes from three directors at Nabors, 49% support for a report disclosing political spending at NRG Energy, and, at Anadarko, 42% support for a report on stranded assets.
More interesting, however, is the analysis of the asset management voting practices. Thirteen of the top asset managers in the world supported at least half of the shareholder resolutions that aimed to improve governance and address climate change risks. But some asset managers had much better records than half. Deutsche Asset Management and Alliance Bernstein supported 83% of the resolutions, while Legg Mason backed 88% and Principal Global Investors supported 92%.
Calvert’s new parent Eaton Vance had an impressive 58% record for a more traditional asset manager. There is a stark difference between two of the major Wall St. firms, with JP Morgan Asset Management supporting just 16% of resolutions, while Morgan Stanley Investment Management supported 75%.
Of the top three, only State Street Global Advisors had any kind of a record, at 61% support. The largest firm, BlackRock, had a 12% support record. Vanguard, while better, was still at just 22% support. BlackRock’s record was only the second worst, however, since Capital Group, the eighth largest firm by assets under management, supported only 9%.
A detailed table of votes on all the resolutions surveyed, however, shows that support levels at the top two firms largely came from supporting proxy access resolutions or, in the case of Vanguard, voting against a couple of pay resolutions at BP and Nabors. If the survey confined itself to strictly climate resolutions, both firms would have scored zero. Link