Capital Group has been ranked the worst asset manager for its voting record on climate change, supporting just 5% of resolutions in favour of climate action.
The voting record of 57 asset managers on 65 resolutions in favour of addressing action on climate change were analysed by responsible investment charity Shareaction.
Asset managers with the worst records were all US based.
T Rowe Price’s record was almost as bad as Capital Group with only 5.3% of its votes in favour of climate action resolutions.
Blackrock and JP Morgan Asset Management both voted in favour of just 6.7% while Vanguard voted in favour of 8.3%.
‘Voting is an important part of our fiduciary duty’
By comparison, UBS Asset Management, which had the strongest voting record, supported 90% of climate action resolutions. The asset manager requires its companies to have a strategy for reducing greenhouse gas emissions, to have explicit goals and to report on progress.
“Our voting record reflects this,” USB AM head of sustainable and impact investing Michael Baldinger said. “Voting is an important part of our fiduciary duty to clients and integral to both the investment process and our overall stewardship approach.”
Worst offenders respond
Capital Group told Portfolio Adviser said its investment team considers all shareholder motions. A spokesperson said: “We agree with the importance of proxy voting as a reflection of long term decision-making. However, the vast majority of votes tracked here relate to issues far broader than climate, and present an inaccurate reflection of our engagement in this area.”
T Rowe Price said it uses its stewardship to “increase the probability the company will outperform its peers” and proposals on environmental and social issues are considered on a case-by-case basis.
A spokesperson said: “We support well targeted proposals addressing concerns that are particularly relevant for a company’s business that have not yet been adequately addressed by management. It is not our objective to use our vote to increase the level of conflict with the companies where our clients hold investments.”
JPMAM described voting as one component of its stewardship. “We’re always seeking to proactively engage with companies to ensure we’re working towards creating long-term value for our clients.”
They’re driving us head-on into a climate emergency
But Shareaction said these firms’ activities are not up to standard.
“Ultimately, these investors will be judged on their voting, which is the most powerful tool at their disposal,” said Shareaction senior campaigns officer Jeanne Martin.
“They have the power to put the brakes on the climate emergency, but they’re on auto-pilot, driving us head-on into it.”
The report noted six out of the 10 worst performers – including Blackrock, JPMAM and State Street Global Advisors – had come out in favour of the Taskforce for Climate-related Financial Disclosures (TCFD).
Passive managers need to stop being passive stewards of capital
The Shareaction report builds on similar analysis by Majority Action in September that singled out Blackrock and Vanguard for their poor voting records.
Blackrock said at the time it had the largest stewardship in the industry while Vanguard pointed to its engagement record.
Both responses were slammed as inadequate.
Commenting on the Shareaction report, Merseyside Pension Fund portfolio manager Owen Thorne said: “Passive investment managers have for far too long been passive stewards of capital. Asset owners like ourselves are becoming increasingly dissatisfied with how large index funds vote on climate change resolutions.”
The Shareaction report was more global in scope than the Majority Action report, which focused on the US.
