The report analyzed the 2022 voting decisions of 20 asset managers at S&P 500 companies in climate-critical sectors — energy, electric power and financial services — to see how they support management-sponsored director votes.
"Broadly what we are seeing among the 20 largest asset managers is that those who have been taking responsible action in the past — holding directors accountable — have only been stepping up that action," said Eli Kasargod-Staub, executive director of Majority Action, in an interview, but there is also more polarization among asset managers.
That polarization includes more divergence on director support. The five asset managers with the lowest support for such directors — PIMCO, Amundi Asset Management, Legal & General Investment Management, UBS Asset Management and Franklin Templeton — decreased their director support even more than they did during the 2021 proxy season.
By contrast, the five large asset managers, including BlackRock and Vanguard, increased their support for directors in 2022, with 14 of the 20 largest managers supporting more than 95% of management-sponsored directors at climate-critical companies, up from 13 in the 2021 proxy season, the report says.
It also found more asset managers updating their respective proxy voting policies to enable voting against directors at companies that fail to meet climate performance expectations, with 12 of the 20 now having policies, including seven that updated them before the 2022 proxy season.
Still, while asset managers are adopting stronger policies and starting to use them more aggressively, Mr. Kasargod-Staub said, the expectations are low when it comes to climate oversight. In 2022, most managers settled for companies to make climate-related disclosures, as opposed to having specific strategies for addressing it, the report said.
Of the 12 asset managers with policies that enable votes against directors for climate oversight failure, only three supported fewer than 95% of directors at climate-critical companies, and only Legal & General Investment Management explicitly set a global warming goal in its proxy voting policy.
State Street Global Advisors declined to comment on the report, while BlackRock and Fidelity did not immediately respond to requests for comment.
In a emailed statement, Vanguard said, "As we've long maintained, we consider climate change to be a material risk to companies and their shareholders, and are committed to continuing to help our investors navigate its impact on their long-term financial success."
Majority Action's 2023 Proxy Voting Guide for a 1.5ºC World recommends that asset managers and asset owners have proxy voting policies that address the material and systemic climate risk facing shareholders, including target setting and capital allocation, and that shareholders commit to vote against directors at companies failing to meet the climate performance targets.
