Asset manager support for shareholder resolutions aimed at tackling social and environmental issues hit a new low last year, driven by the voting behaviour of large US asset managers.
New research from ShareAction, a responsible investment non-governmental organization (NGO), revealed the concerning retreat from ESG issues among asset managers in its 2024 proxy voting survey.
Its report – Voting matters 2024: Are asset managers using their proxy votes for action on environmental and social issues? – ShareAction found the world’s largest asset managers had blocked progress on key ESG issues last year.
Claudia Gray, head of financial sector research at ShareAction, said: “This is the worst result we’ve seen from asset managers in the six years we’ve been monitoring their voting performance and shows a worrying retreat from ambition when it’s most needed.”
Evidence of how poor last year’s results were is highlighted by the fact that just 1.4%, four out of 279, of the shareholder proposals assessed in the survey received majority support, down from 21% in 2021.
ShareAction also conducted its first-ever analysis of votes on management items; it found that asset managers are failing to use their votes to express dissatisfaction with companies’ strategic approaches to important social and environmental issues.
“This should be of great concern to asset owners who are putting their faith in asset managers to act in their best interests. If ever we needed asset owners to be the drivers of responsible investment, it’s right now. We need their leadership to hold asset managers to account at such a critical time for people and planet,” Gray added.
Additionally, only two out of 73 shareholder resolutions on climate change received enough shareholder support to pass.
Asset managers who blocked corporate action by voting against shareholder resolutions to protect human rights, nature and climate included the four largest asset managers in the world: BlackRock, Fidelity Investments, State Street Global Advisors and Vanguard, which together manage around €22trn in total assets.
ShareAction’s research revealed that an additional 48 shareholder resolutions would have passed had these four asset managers chosen to support them.
In addition to these findings, the group’s research confirmed that asset managers are not voting in line with commitments they have made to net zero or as part of Climate Action 100+.
The research comes at a time of increasing concerns that proxy advisers need to do more in order to better reflect investor priorities on climate issues and transition plans.
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