MAC: Mines and Communities

US asset managers rank worst in climate change combat

Published by MAC on 2019-11-04
Source: Investment Week (2019-11-04)

Share Action issues report

BlackRock Mining Trust, based in the UK, is one of the world's heaviest investors in extractive industries

Overseen by BlackRock of the USA, the bank has now been named as one of the three US asset owners who've done the least to compel appropriate climate action among the companies in which it holds investments.

While the American culprits continue piling verbal tosh on meaningless self-justification, it's European asset managers who've come out top of the pile in terms of meaningful responses to impending "extinction".

[Comment by Nostromo Research]

 

US firms lead worst-performers on pro-climate proxy voting activity

Mike Sheen

Investment Week

4 November 2019


Asset management giants Capital Group, T. Rowe Price and BlackRock have
been revealed as the three worst-performing asset owners with regard to
climate-related proxy voting, according to a report by campaign group
ShareAction.

The report, Voting Matters, demonstrates that US groups are lagging
European counterparts in forcing positive climate action from companies
they invest in, which ShareAction said is "highly concerning" given 35% of
global AUM [Assets under management] resides within the 20 largest US fund
managers.


ShareAction found that over the last two years Capital Group has voted in
favour of just 4.9% of climate-related shareholder votes associated with
companies it invests in, while T. Rowe Price and BlackRock registered 5.5%
and 6.7% respectively.

J.P. Morgan, Vanguard, Fidelity and Wellington Management International
all also registered pro-climate voting records of less than 10%, while the
entire list of top-ten worst-performing asset managers was populated by US
firms.

Notably, six of the ten worst performers - BlackRock, J.P. Morgan,
Fidelity, Wellington, Northern Trust and State Street Global Advisers -
have come out in support of the Taskforce for Climate-related Financial
Disclosures and joined at least one investor engagement initiative on
climate change.

The report said that "climate change is one of the highest priority issues
facing investors", and "significantly more remains to be done to avert the
worst consequences".

In a statement, Capital Group agreed that proxy voting is an important
"reflection of long-term decision-making" but argued that the "vast
majority of votes tracked" by ShareAction "relate to issues far broader
than climate" and therefore "present an inaccurate reflection of our
engagement in this area".

It added: "Last year alone, we conducted thousands of face-to-face
meetings with companies, their suppliers, customers and regulators, to
assess their businesses - including how they approach ESG issues."

Similarly, T. Rowe Price said in a statement that it is its policy to
"analyse every shareholder proposal of a social or environmental nature on
a case by case basis" and "generally speaking, 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 said: "It is not our objective to use our vote to increase the level of
conflict with the companies where our clients hold investments. Instead,
our objective is to use our influence - through the various stewardship
activities to increase the probability that the company will outperform
its peers, enabling our clients to achieve their investment goals.

"A proxy vote is an important shareholder right, but its power is limited
to the one day per year when a company convenes its annual meeting.
Influence - earned over time and applied thoughtfully - is a tool we use
every day."

BlackRock did not respond to a request for comment at time of publication.

BlackRock under renewed pressure to support climate action

Best performers

By contrast, every firm in the list of top performers is a European firm -
three of which are based in the UK - each with pro-climate voting records
of at least 78.7%.

The top three performers were UBS Asset Management, Allianz Global
Investors and Aviva Investors, with pro-climate voting records of 90.2%,
88.5% and 86.9% respectively.

Head of sustainable and impact investing at UBS AM Michael Baldinger said
that over the last 18 months the firm has been "deepening" engagement with
companies "to drive positive change toward a low carbon economy".

He added: "We expect companies to have a strategy for reducing greenhouse
gas emissions, to be clear about goals, and to report on progress. Our
voting record reflects this.

"Voting is an important part of our fiduciary duty to clients and integral
to both the investment process and our overall stewardship approach."

Similarly, director of corporate governance at LGIM Sacha Sadan said the
firm "owes it to our millions of clients to continue using our shareholder
power and our votes, in order to keep climate change on the board agenda
and encourage companies to step up".



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