Goldman Sachs Asset Management has made some updates to its proxy-voting policies to reflect ESG concerns.
The changes will impact how the firm votes as a shareholder in public companies, GSAM said in a news release on Thursday.
GSAM said it will vote against audit committees at companies that "do not disclose material greenhouse gas emissions data and have made insufficient progress in doing so," the release noted, adding that this measure aligns with the new proposal on climate risk disclosures unveiled earlier this week by the Securities and Exchange Commission.
In the U.S., GSAM said the policy will "help drive progress on emissions reporting ahead of the implementation deadline for the SEC proposal, which is still a number of years off." Outside the U.S., the policy will "help drive progress more generally."
Catherine Winner, global head of stewardship at GSAM, said in an email that in "the past, we have used engagement, rather than voting, to address the lack of emissions disclosure. In 2020, we developed an engagement framework in which we identified companies globally not disclosing greenhouse gas emissions data considered material." She added that "while some progress has been made, through this updated policy we aim to hold the companies that have made no improvements accountable and push for greater transparency."
GSAM also said in the release it will "cast votes against companies that are violating the ten UN Global Compact principles and have not made significant changes to address those violations."
The United Nations Global Compact is a non-binding pact that encourages companies to adopt socially responsible practices in the areas of human rights, labor rights, environmental protection and fighting corruption.
Ms. Winner explained that violations of UN Global Compact principles vary significantly among companies globally. "As a result, we plan to implement voting action on a case-by-case basis, considering factors like the severity of the issue, the time horizon, and the company's remediation efforts, as well as any insights from our direct engagements," she added.
The third policy change, GSAM stated in the release, involves a new approach to dealing with shareholder proposals and policies according to region. "We have always aimed to reflect regional differences in our voting approach," Ms Winner said. "We continue to build on this over time, recognizing that governance practices vary by market. We believe formalizing the region-specific breakouts allows us to further develop a nuanced approach to voting that is region- and country-specific while staying true to our guiding principles."
GSAM has $2.5 trillion in assets under supervision.