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Principal tops rankings of proxy voting aligned with climate-risk mitigation issues

Capital Group, Fidelity and BlackRock among managers at the bottom of the list

Principal Global Investors ranked first among 30 of the largest investment managers in casting proxy votes to align with climate-risk mitigation issues at companies with large carbon footprints in the oil and gas and utility sectors, said a report from 50/50 Climate Project released Wednesday.

Principal voted in favor of 92% of the 27 proxy proposals aligned with climate risk mitigation at 18 companies in 2016.

Legg Mason (LM) ranked second, voting 88% in favor of the proposals at the companies, followed by AllianceBernstein (AB) and Deutsche Asset Management, both at 83%, and Wells Capital Management at 81%.

Capital Group ranked last in the study, voting in alignment with climate-risk mitigation on 9% of the proxy proposals, followed by Fidelity Investments at 11%, BlackRock (BLK) and Invesco (IVZ), both at 12%, and Prudential Financial and J.P. Morgan Asset Management (JPM), both at 16%.

Issues identified in the report, “Key Climate Vote Survey: 2016,” included a shareholder proposal to require companies to analyze and disclose the effects of climate change on their business, a proxy issue voted on at Occidental Petroleum, Exxon Mobil, Chevron, Southern Co. and FirstEnergy.

Other proxy proposals included voting on directors to promote board accountability and competency on climate–related issues at CONSOL Energy, EOG Resources, FirstEnergy and Nabors Industries.

Other proxy proposals in the report included say-on-pay, or shareholder advisory voting on compensation of CEO and other top executives, at companies — BP, Chevron, Nabors and Southern — where climate-aligned incentives were an issue:

“The analysis of survey results finds that there is an emerging consensus among institutional investors that climate issues should be elevated to a board level focus using a number of engagement strategies,” Rich Ferlauto, member of the governing board of 50/50 Climate Project, said in an e-mail.

The project’s focus includes research and advocacy in working with institutional investors to encourage climate risk management at companies.

Not all the companies were targeted by all the proxy-voting proposals in the study.

The report based the proxy voting of the investment managers on their mutual fund voting disclosures.