Almost three-quarters of money managers exercise active ownership as part of their oversight of environmental, social and governance factors in their investments, a report from Cerulli Associates said.
According to the report, 72% of surveyed money managers engage with companies in the form of dialogue with management, proxy voting and shareholder resolutions. Ninety percent of managers surveyed use proxy voting, 78% engage in dialogue with management, 46% in shareholder advocacy, 40% in shareholder resolutions and 16% in other engagements.
Forty percent of those surveyed, meanwhile, partake in shareholder resolutions.
"Communication between investors and a company's leadership is a fundamental part of active ownership," said Michele Giuditta, director of institutional research at Cerulli Associates, in a news release. "It gives asset managers the ability to explain specific ESG risks and opportunities, and encourages action that may preserve or improve the company's performance and enhance shareholder value."
When asked which ESG factors they incorporate into their investment processes, climate change/carbon footprint was the top factor, with 94% of surveyed participants citing it. Board issues and/or the composition of boards is the next highest factor, incorporated into 90% of surveyed participants' investment processes.
The rest of the top five were: 82% of managers citing bribery and corruption; 80% citing labor standards; and 78% citing gender.
Also, 68% of survey respondents say they have investment staff members committed to ESG-related responsibilities.
Cerulli Associates surveyed executives at 54 money management firms in the second quarter, representing over $7.5 trillion in assets under management.
