None of the 100 largest U.S. mutual funds supported any of the 33 global warming resolutions filed with U.S. companies in 2005, according to a proxy voting report commissioned by Ceres, an investor coalition. However, a new survey by the Civil Society Institute, a research and advocacy organization, shows a majority of U.S. mutual fund investors want their fund managers to vote in favor of such resolutions and to actively screen companies linked to climate change problems.
According to the poll, 79% of respondents "think that companies should analyze the long-term financial impacts that global warming will have on their businesses and on the potential value of their stock to people who either own shares directly or indirectly through a mutual fund," the statement said.
"Mutual funds, which are responsible for the retirement investments of millions of investors, should join in with their institutional investor peers" involved in the issue, Alisa Gravitz, executive director of Co-op America, a consumer and investor organization and a member of Ceres, said in a statement.
"Mutual fund investors and their funds are completely at odds today on the topic of global warming," Pam Solo, president of Civil Society Institute, said in the statement. "The fact that mutual funds are 'missing in action' on climate change is an unacceptable situation that investors should insist on changing."
Charles Freadhoff, American Funds spokesman, said, "We don't ever discuss reasons for our votes."
"Most policy issues, while we may support them philosophically, generally don't create shareholder value and therefore we abstain from voting on such matters, said John Deming, spokesman for Vanguard, which abstained from voting on the resolutions in question last year.
Both fund spokesmen noted their proxy voting guidelines and votes are posted on their websites.
Vincent Loporchio, Fidelity spokesman, said: "Our mutual funds are managed with one overriding goal: to provide the greatest possible return to fund shareholders. In achieving that goal, our investment managers may consider a variety of risks ... that are likely to have a bearing on a company's future earnings. If it is shown that global climate risk poses a real and measurable risk to a particular company's future earnings, that could well be a factor taken into account in an evaluation of the overall investment merits of a particular company..A proxy vote may happen once a year. We're buying and selling stocks every day based on our fundamental research and analysis. That process, in our experience, contributes more to overall investment returns for our mutual fund shareholders than proxy voting."
Among Interfaith Center on Corporate Responsibility members and associates, 30 shareholder proposals on global warming have been filed at 25 companies so far for the 2006 proxy season, according to its EthVest database.