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Voting Matters 2021: Are asset managers using their proxy votes for action on environmental and social issues?


The Covid-19 pandemic has deepened already growing social and environmental challenges, and the asset management sector has a vital role to play in addressing these existential crises. Proxy voting is a core part of an asset manager's fiduciary duty. Here we examine how 65 of the world’s largest asset managers voted on 146 social and environmental resolutions. We found that:

  • The world’s largest asset managers continue to block efforts to make progress on environmental and social issues.
  • Around one in three environmental resolutions received majority support, with resolutions on lobbying receiving more votes than those on corporate strategy.
  • The asset management sector is failing to support the vast majority of resolutions focused on social issues, with considerably lower levels of support compared to environmental resolutions.

Proxy voting is a core part of an asset manager's fiduciary duty, and a key way in which the sector can influence companies on social and environmental issues. Yet overall voting performance across the industry remains poor and stagnant. Just 21 per cent (30 of 146) of environmental and social resolutions assessed recieved over 50 per cent support in 2021. This represents little movement from our 2020 analysis. In fact, the 51 asset managers assessed across both years increased the percentage of their 'for' votes by just four per cent.

On top of this, despite their substantial resources, only six of the world’s largest asset managers filed or co-filed a shareholder resolution at any of the companies we assessed.

18 additional resolutions would have passed if one or more of the Big Three had voted differently

The three largest asset managers in the world - Blackrock, Vanguard Group and State Street Global Advisors - account for $20 trillion in assets under management. That is roughly the same as the 30 largest European asset managers. Their outsized influence means how they vote can determine whether a resolution reaches majority support or not.

Conservative voting from these three alone can hold back progress. This year, we found that 18 additional resolutions would have recieved 50 per cent support if one of more of the Big Three voted differently.

Breakdown of resolutions that would have passed with Big Three support

What's more the decision to vote against these resolutions often puts them at odds with their own proxy voting advisors. ISS, which provides proxy voting advice for all three managers recommended they vote in favour of 14 of the resolutions, and against just one.

This represents a growing trend of asset managers being more conservative than those they hire to advise them.

The six largest asset managers vote more conservatively than their proxy advisors recommend

ISS and Glass Lewis (the two largest proxy advisors) recommended investors support 75 per cent and 44 per cent of assessed resolutions, respectively. Yet 44 of the 65 assessed managers (68 per cent) voted in favour of fewer resolutions than recommended by ISS. On top of this, the six largest, BlackRock, Vanguard, Fidelity Investments, State Street Global Advisors, Capital Group, and J.P. Morgan Asset Management all supported less than 40 per cent of resolutions that they voted on.

Asset managers’ percentage of ‘for’ votes cast relative to the percentage of ‘for’ recommendations by ISS and Glass Lewis

Some asset managers show it is possible to make large year-on-year improvements

Although the voting performance of the industry as a whole remains stagnant, some individual managers have shown substantial improvement. Credit Suisse and Nordea increased their percentage of ‘for’ votes by 61 percentage points each, supporting 77 per cent and 91 per cent of ESG resolutions this year, respectively.

BlackRock, the world’s largest asset manager, supported 40 per cent of the assessed resolutions this year, compared to 12 per cent last year, although it still voted against a significant amount of resolutions, including 100 per cent of those on executive pay disparity, employee representation at board level, public health and tobacco, and weapons companies.

NZAM initiative and CA100+ members tend to outperform non-members, but both groups contain significant laggards

Asset managers that are signed up to the Climate Action 100 (CA100+) or Net Zero Asset Managers (NZAM) initiatives vote more supportively than non-members on climate resolutions. However, members still voted against a third of resolutions, and both initiatives contain significant laggards.

Swedbank Robur and Santander Asset Management supported fewer than 20 per cent of climate resolutions at companies they had holdings, despite being members of both initiatives. NZAM member MEAG did not support a single climate resolution.

The proportion of ‘for’ votes on climate resolutions by each asset manager who is a member of CA100+ or the NZAM initiative

Support for ‘S’ resolutions is still lacking for most asset managers

Of the 89 social resolutions assessed, just 13 (15 per cent) recieved majority support from asset managers. All of these resolutions called for disclosure of diversity information. More action-focused resolutions struggled to get more than 30 per cent support. Asset managers appeared most reluctant to support resolutions which could impact executive pay. There were low levels of support, for example, for those resolutions to link CEO pay to employee salary bands. Resolutions on health or working conditions also garnered limited support.

Social resolutions based on majority support and average 'for' votes

With rising recognition of the sector’s influence and a boom in demand for sustainable investment products, asset managers will increasingly be in the spotlight. In 2022, we urge asset manager to develop and strengthen their voting policies. We hope to see more commit to support environmental and social resolutions, and to consider co-filing their own resolutions where they do not see sufficient progress by companies.

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