Northern Trust revises proxy voting guidelines to reflect social and environmental issues

€3trn custody giant details more “nuanced approach”

Northern Trust, the giant US custodian and asset manager, says it has amended its internal proxy voting guidelines to boost its support of social and environmental issues to reflect not only new regulations from the SEC but the growth of issues being voted on.
“In 2010, we made certain revisions to our proxy voting guidelines dealing with social and environmental issues,” the Chicago-based firm states in its first-ever Corporate Social Responsibility Report.
Now it will generally vote in favour of proposals on sexual orientation or gender identity, environmental impact, corporate sustainability reports and greenhouse gas disclosure and energy efficiency.
Although Northern Trust – a signatory to the United Nations Principles for Responsible Investment through its NTGI funds arm – says it generally supports company boards when voting on shareholder- initiated social and environmental proposals, it said: “”We have concluded from recent events that a more nuanced approach is advisable.”
It referred to revised Securities and Exchange guidelines on what can be excluded from proxy ballots and a “proliferation” in the types of issues being voted upon.
“We are working with our proxy voting vendor to identify specific types of proposals that may merit our support,” the company said.The report followed Global Reporting Initiative (GRI) guidelines and earned a B+ rating – with external assurance from Deloitte & Touche.

“We are thrilled to see Northern Trust report on its environmental, social and governance performance following the GRI guidelines,” said Mike Wallace, Director, Focal Point USA at the GRI.

“Business has entered a new age of transparency, and our CSR report is a reflection of our continued commitment to the highest standards of transparency and disclosure,” Northern Trust’s Chairman and Chief Executive Frederick Waddell said.

Northern Trust, which has $4.4trn (€3trn) in assets under custody and $662.2bn under management, has set a series of medium term goals. They include: expanding its SRI investment management capabilities; enhancing its existing ESG monitoring and measurement tools for investors; launching additional commingled Index SRI products; expanding proxy voting research and analysis and researching engagement opportunities.
According to the report, Northern Trust Global Investments has more than $18bn (c.6% of total assets under management) in socially screened strategies via some 10 pooled funds and 50 separately managed accounts.