The U.K. Association of Member Nominated Trustees found that few money managers publicly state voting policies and guidelines on climate change, gender and ethnic diversity in the U.K., Europe and the U.S. in a report published Thursday.
Following claims that fund managers were unwilling to accept client-directed voting in pooled fund arrangements, the association surveyed 42 managers, finding that half of them did not have a climate change-related voting policy or guidelines on their voting policies.
Only 25% of the managers that published their policies had voting guidelines on excessive remuneration of investee companies' top executives.
Also, more than 30% of the managers made no reference to gender diversity on boards and nearly 75% of them did not mention ethnicity with regard to board diversity in their policies.
As new mandates from the U.K. and the European Union's regulators are coming into effect this year, requiring investors and managers to disclose and report on their ESG and pay voting policies, the association has launched a formal complaint to the U.K. Financial Conduct Authority, asking the financial services watchdog to further investigate the issue and propose remedies.
AMNT recommended that the FCA set minimum standards for voting policies and practices, including a provision that managers be required to accept client voting policies to allow them to fulfill their regulatory obligations. AMNT also wants the FCA to require managers to publicly disclose all of voting policies, guidelines and records in a manner that is easy for asset owners to access.
"It's utterly unacceptable that most pension fund managers don't have published policies and practices to combat climate change, and public commitments to tackle excessive pay and promote gender and ethnic diversity are all too rare," said Guy Opperman, minister for pensions and financial inclusion said in a news release commenting on the report. "Being vague or secretive with the trustees and savers they represent is out of order. These obstructive fund managers need to take action now as effective and responsible shareholders."
