US fund managers react to damning climate voting report

US fund managers have spoken out in response to a recent report that claimed they are “overwhelmingly” blocking pro-climate proposals, saying that there is more to engaging with companies than proxy voting.

Capital Group – which was described as the worst performer for proxy voting on climate issues in a ShareAction report – said it regularly engaged with the companies it invests in on issues such as environmental, social and governance (ESG) criteria.

According to ShareAction, over the last two years Capital Group voted in favour of just 4.9% of climate-related policies associated with companies it invests in.

“Climate is an important issue, which is why we regularly engage with boards and management as part of our analysis of companies,” a Capital Group spokesperson said.

“The vast majority of votes tracked [in the report] relate to issues far broader than climate and present an inaccurate reflection of our engagement in this area. Last year alone, we conducted thousands of face-to-face meetings with companies, their suppliers, customers and regulators, to assess their businesses – including how they approach ESG issues,” the spokesperson said.

ShareAction analysed shareholder votes cast by 57 of the world’s largest asset managers on a total of 65 proposals including emissions reduction targets and climate reporting that the organisation said would speed up corporate action on climate change.

T. Rowe Price and BlackRock were second and third worst performers, registering 5.3% and 6.7% votes in favour of climate issues respectively.

A spokesperson for T. Rowe Price said it was the firm’s policy to analyse every shareholder proposal regarding social and environmental issues on a case-by-case basis.

“Generally speaking, we support well targeted proposals addressing concerns that are particularly relevant for a company’s business that have not yet been adequately addressed by management. It is not our objective to use our vote to increase the level of conflict with the companies where our clients hold investments,” the spokesperson said.

According to the firm, it aims to influence the companies it is invested in through stewardship activities, agreeing with Capital Group that affecting change in business behaviour goes beyond proxy voting.

“A proxy vote is an important shareholder right, but its power is limited to the one day per year when a company convenes its annual meeting. Influence—earned over time and applied thoughtfully—is a tool we use every day,” the firm said.

BlackRock was contacted.

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