ShareAction voting study throws up voting anomalies among some CA100+ signatories

ESG credentials don’t necessarily translate into responsible climate voting records

A study by UK responsible investment organisation ShareAction has thrown up some anomalies in the climate-related voting records of some of the asset manager signatories of the Climate Action 100+ investor initiative.

The study, entitled Voting Matters: Are asset managers using their proxy votes for climate action?, ranked 57 asset managers across a sample of 65 shareholder resolutions linked to climate change issues.

While European CA100+ investors feature in the top five best performers (UBS, Allianz, Aviva, HSBC, LGIM and Axa), and the bottom 10 is populated by American non-CA100+ asset managers (including the “Big Three”: BlackRock, Vanguard and State Street), the report shows some discrepancies have emerged.

Jeanne Martin, Senior Campaigns Officer and author of the report, stated: “A number of CA100+ investor signatories fail to support resolutions at CA100+ focus companies, such as Chevron, Duke Energy, Ford and General Motors (GM), some of which were originated by CA100+ investor leads.”

Take Northern Trust – which is not only a supporter, but a participant in CA100+ – ranks eighth among the worst climate voters, with just 21.3% of support for climate related resolutions.

But there is a gulf between this level of support and the likes of T. Rowe Price (5.3%), joint joint third placers BlackRock and JP Morgan (6.7%) and Vanguard (8.3%).

Northern Trust is slightly behind State Street with 26.2%.

As reported by RI a month ago, Northern Trust voted against one of the most critical resolutions this year. This was the independent chair proposal at Exxon, which became a focus in lieu of the climate resolution that the company was able to dodge.

Schroders did not vote for this independent chair proposal either, filed by the Church Commissioners and the New York State Common Retirement Fund.

ShareAction’s Martin stated in the report: “Northern Trust voted against 12 out of the 16 resolutions filed at CA100+ focus companies included in this study. Some of these resolutions were originated by the CA100+ lead investors of these companies.”

Also at Exxon, the climate change board committee resolution, whose proponent Arjuna Capital had called on peers to support it through a ‘notice of exempt solicitation’, was voted against by some CA100+ participants.

They are: Amundi, APG, Asset Management One, Caisse de Depot et Placement du Québec, HSBC AM, Janus Henderson, Manulife, Mitsubishi UFJ Trust & Banking Corporation, Northern Trust and Schroders.Other key climate-related resolutions promoted by CA100+ participants did not secure backing from peers.

APG, which co-leads engagement at Nestlé for CA100+, voted against Chevron’s transition planning resolution, which was co-filed by As You Sow, Arjuna Capital and Boston Trust Walden Company. APG had voted for a similar resolution the previous year.

Besides Northern Trust, State Street voted against Ford’s lobbying disclosure resolution filed by New York State Common Retirement Fund, Robeco and the Unitarian Universalist Association. State Street had supported a similar resolution in 2017, but changed its vote in 2018.

Also on lobbying, ShareAction’s report highlighted a number of “historical resolutions” that are either stagnating or declining when it comes to support from CA100+ participants.

At BlackRock (as an issuer) and United Parcel Service, Union Investments has consistently voted against such historical resolutions. And Schroders and Aberdeen Standard have started to vote against them at FedEx and CH Robinson Worldwide.

In addition, ShareAction said it was not able to obtain any data of Sumitomo Mitsui Trust Asset Management, whose parent company is a CA100+ participant. Similarly, it obtained less than 15% of non-CA100+ investor Credit Suisse Asset Management’s proxy voting data.

Another highlight of the study is that the filer of a resolution matters. There’s a higher average rate of support if the filer is an institutional investor (38.4%) versus an NGO or retail investor (11.6%).

ShareAction’s study also pointed out all of the US laggards (excluding Capital Group, T. Rowe Price and MetLife) have joined at least one initiative on climate, such as the Taskforce on Climate-related Financial Disclosures, Ceres, the Investor Group on Climate Change or Institutional Investors Group on Climate Change.

“Despite their public commitment to climate-related disclosures and memberships of engagement initiatives, these asset managers rarely vote in favour of resolutions on climate-related disclosures and in line with the aims of such engagement initiatives,” ShareAction’s Martin wrote.

All of the worst-rated asset managers identified by study have been signatories of the Principles for Responsible Investment for at least five years.