The 50/50 Climate Project released their Key Climate Vote Survey 2017 (link) of votes by America’s largest investors. Those attending last week’s informative Fall Conference of the Council of Institutional Investors in San Diego found out about it and many other newsworthy items.
Key Climate Vote Survey 2017: Groundbreaking Season?
First-time approval of climate risk proposals at Exxon (XOM) and Occidental (OXY) represents a huge win. Victory was only possible because of a highly visible shift in voting by mainstream funds State Street, J.P. Morgan, as well as from BlackRock and Vanguard, which joined climate risk proponents for the first time.
However, do not get complacent. More effort to get mutual funds to address climate change is still needed. According to the 50/50 Climate Project representatives at CII, Vanguard backed only 15% of such proposals, while Blackrock voted for only 9% — despite both managers’ high-profile support of resolutions at ExxonMobil and Occidental. The cynic in me says votes may be more driven by the potential for adverse publicity, rather than potential impact on value, although the two are undoubtedly correlated. Compare to Vanguard’s Investment Stewardship 2017 Annual Report.
The Survey finds:
Asset managers that lag their peers also vote in line with company recommendations even in the face of major board-level governance and performance failures, including on flawed executive compensation programs.
Key Climate Vote Survey: Methodology
The Key Climate Vote Survey is designed to be a resource for fiduciaries to ascertain how their investment managers are addressing climate risk and promoting boardroom competency through their proxy voting activities. First, the Key Climate Vote Survey identifies the most important votes on climate risk. Then the Key Climate Vote Survey analyzes publicly disclosed voting records of the largest global investment managers.
Funds were excluded if funds within the fund family vary their vote from each other substantially. That eliminated AXA Investment Managers and Allianz Global Investors. Abstentions were counted as votes against climate resolutions. Funds cannot duck the issue by failing to take a position. A similar methodology was applied to voting against specified directors. Data were compiled by Fund Votes.
Take Action
Try to find your funds on the list. If they had low support for proposals addressing climate change, ask them why. Consider switching to a comparable product at a fund with more conscientious voting. The world our children inherit depends on our actions. Follow the 50/50 Climate Project on Twitter @5050Climate. Find more from the Fall Conference of the Council of Institutional Investors at #ciifall2017.
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