More than 80 percent of major mutual fund companies supported less than half of the 2012 climate-related shareholder resolutions covered in a report by sustainability leadership advocate Ceres.
This is despite a growing number of institutional investors publicly signalling that they view information about climate risks as material to their investment decisions, according to the Ceres analysis.
The study looked at proxy votes cast in 2012 by 43 of the largest US mutual fund companies. That year 48 resolutions were withdrawn before going to vote after the companies responded affirmatively to the shareholder requests. The Ceres study tracked 46 climate resolutions that went to vote during the 2012 proxy season.
Just eight of the 43 mutual fund companies – namely DWS, AllianceBernstein, Oppenheimer, Wells Fargo, Delaware, Fifth Third, GMO and TIAA-GREF – supported more than half of the shareholder resolutions covered in the study.
The three firms with the highest rate of support of such resolutions – DWS, AllianceBernstein and Oppenheimer, which collectively manage more than $930 billion in assets – each supported over 80 percent shareholder resolutions filed with companies on climate change business risks.
Until 2011, DWS had never cast a single vote in support of climate-focused resolutions tracked by the study. AllianceBernstein had cast only two votes in support of climate resolutions over the previous 10 proxy seasons, until voting for 21 of the 26 resolutions that came to vote across its portfolio funds in the 2012 proxy season, Ceres says.
Six fund families failed to support even a single climate-related resolution in 2012, including BNY Mellon, Franklin Templeton, ING, Pioneer, Putnam and Vanguard. Vanguard remains the only fund family to have never cast a single vote in support of a climate-related resolution in the nine years covered by the Ceres survey. Last year it opposed 59 percent of resolutions that came to vote within its portfolio of funds and abstained on 41 percent of resolutions, Ceres says.
The 10 resolutions requesting that companies prepare a sustainability report including mitigation measures for climate-related risks earned an average of 38 percent support and the four resolutions requesting that companies adopt quantitative greenhouse gas emission reduction goals earned an average of 27 percent support from shareholders. These outcomes are “clear signals” of growing market demand for climate-related corporate disclosure, Ceres says.
According to a report released in April 2012 by Ernst & Young, investor attention to the “triple bottom line” of environmental, social and economic performance is growing and raising support levels for shareholder resolutions on environmental and social issues.