US-based proxy voting firm Glass, Lewis & Co. has teamed up with environmental, social and governance (ESG) research house EIRIS to launch a service to enable institutional investors to incorporate company directors’ environmental and social performance into their voting.
The service, initially based upon 1,500 leading global companies, will combine EIRIS’s assessments of corporate performance on environmental and social issues with Glass Lewis’ knowledge of the responsibilities of individual directors and board committees. Glass Lewis clients will have to subscribe to the service, which builds on an existing relationship between the two companies.
It will allow Glass Lewis’ proxy voting clients the option of directly linking their voting in director elections to reflect “dissatisfaction” with inadequate corporate ESG reporting practices, the firms said.
“We are delighted to be able to offer information over the Glass Lewis platform,” said EIRIS Chief Executive Peter Webster.
“How a company tackles environmental and social issues is increasingly becoming an important element in assessing whether a board is fulfilling its responsibilities to look after long-term interests of shareholders.“When the time comes to re-elect directors, shareholders will want to know whether the company has fallen behind on material environmental and social issues.”
Clients using the service will receive supporting analysis from EIRIS as summary notes integrated within the Glass Lewis platform.
“We think investors with a long-term perspective will find this a useful enhancement to the wide range of tools and services we already offer in the governance arena,” said Glass Lewis CEO Katherine Rabin. Financial terms of the arrangement weren’t disclosed.
Glass Lewis, founded in 2003, has clients that collectively manage more than $15trn. It is owned by Canadian pension funds the Ontario Teachers Pension Plan and the Alberta Investment Management Corporation (AIMCo).
Earlier this month EIRIS released a report looking at stock exchanges and sustainability. It interviewed 11 exchanges for Sustainability Initiatives: Insights from Stock Exchanges into Motivations and Challenges.
In September, EIRIS and index firm FTSE announced they would no longer collaborate on the 12-year-old FTSE4Good sustainable index family.