Introduction

Close on the heels of a pandemic, 2022 has shown we still face a host of intimidating challenges. Unprecedented high temperatures and lengthy droughts have occurred worldwide[1]. Biodiversity continues to decline at a catastrophic rate[2]. And inflation has soared, with consequences for human wellbeing around the world[3].

We must address these issues at scale. The asset management sector – which holds more than $103 trillion of the world’s wealth[4] – is critical to achieve this. This wealth is invested in many of the world’s leading companies, which gives asset managers significant influence over company practices. How asset managers vote on company resolutions each year therefore determines the future of our planet.

In this 2022 edition of ShareAction’s Voting Matters report, we reveal how 68 of the world’s largest asset managers voted on 252 shareholder resolutions designed to address current environmental and social crises. We examine voting performance on environmental and social issues, and how it differs from our findings in 2021[5]. For the first time, we also analyse shareholder-filed governance resolutions that directly relate to environmental and social issues, grouped together as Pay and Politics resolutions.

Our annual Voting Matters publication forms part of our campaign to hold asset managers to account and empower their clients. It is intended to be used alongside ShareAction research on voting accountability and the asset management industry, including our Voting Expectations publication, list of Resolutions to Watch and our biannual Global Asset Management Benchmark.

General findings

The world’s very largest asset managers continue to block progress on environmental and social issues, while the sector more broadly shows mixed performance.

1. The four largest asset managers backed fewer shareholder resolutions on environmental and social issues in 2022 than they did in 2021.
2. 49 additional resolutions would have received majority support if the largest asset managers had voted in favour of them.
3. Voting performance has been stagnant in the US and the UK compared to 2021, while European asset managers have shown a large improvement.
4. Asset managers across the board are hesitant to back action-oriented resolutions, which would have the most transformative impact on environmental and social issues.

Findings on environmental resolutions

Environmental issues continue to gain more support from investors than social issues, but resolutions deemed important by voluntary initiatives are not receiving support from many of their members.

1. Members of the Net Zero Asset Managers Initiative (NZAMI) and Climate Action 100+ (CA100+) failed to back a third of climate resolutions on average.
2. Five CA100+ members repeatedly voted against CA100+ flagged shareholder resolutions.
3. Some asset managers are using their voting power to show strong support for biodiversity issues, although very few environmental resolutions currently target global biodiversity loss.

Findings on social resolutions

Shareholder concerns about social issues are considerable, with 117 resolutions in our analysis, but support from asset managers is still lacking.

1. Rationales for opposing action-oriented social resolutions are inconsistent with international human and labour rights standards.
2. Asset managers are slowing down progress on diversity within their own sector.
3. There are pioneering asset managers supporting the passage of progressive health-related resolutions.

Findings on pay and politics resolutions

Company compensation and political spending policies are powerful tools for driving action on climate change and inequality, but many asset managers have not supported resolutions to use them.

1. European asset managers vote much more strongly in favour of healthcare companies aligning their political spending with their publicly stated values than North American asset managers.
2. There is limited investor interest in incorporating climate considerations into executive compensation.

[1] World Meteorological Organization, WMO Provisional State of the Global Climate 2022, January 2021.

[2] WWF, Living Planet Report 2022, 2022.

[3] IMF (2022) World Economic Outlook Update, July 2022: Gloomy and More Uncertain. https://www.imf.org/en/Publica....

[4] Heredia L et al., Global Asset Management 2021, 8 July 2022.

[5] ShareAction (2021) Are asset managers using their proxy votes for action on environmental and social issues? https://shareaction.org/report....

ShareAction does not provide investment advice - read our disclaimer here.

All links accessed November 2022.