Swiss asset managers are failling to assert stewardship strategies having an impact to change the business model of companies in their investment portfolios, according to a study conducted by the Institute for Wealth & Asset Management at the Zurich University of Applied Sciences (ZHAW), in collaboration with start-up rezonanz and Greenpeace Switzerland.
According to the study, which assessed environmental stewardship across the three dimensions of commitment, engagement, and voting, with the main focus on impact materiality, none of the asset managers in the report met minimum requirements for impact-oriented environmental stewardship.
Money managers “do not consistently demonstrate an intention or commitment” to ask investee companies to turn to sustainable business practices, in turn opting for a stewardship approach achieving impact.
Swiss asset managers rarely articulate publicly concrete expectations for companies they invest in, it added.
The authors of the study looked at the records of the 14 largest asset managers active in Switzerland, including Pictet, AXA Investment Managers, UBS Asset Management and Credit Suisse Asset Management, Swisscanto, and GAM Investments, based on the 2023 proxy season, stewardship policies and activities for the year 2023-24.
They conducted a quantitative analysis of the 86 environmentally relevant and meaningful votes from 2023, questioning whether asset managers effectively vote for climate-related proposals, and whether they disclose their dissent to the management of the company to pile up pressure to change business models, it added.
The study analysed the real-world impact of stewardship practices with a narrow focus on climate and biodiversity.
It concluded that asset managers have built structures and processes for engagement, monitoring and voting mainly to improve governance or fend off financial risks, but not to lay out to firms’ “rigorous and complete” action plans to show the path to achieve impact.
Escalation strategies lack an impact-oriented integration of stewardship tools and steps, and stewardship is seen more of a way to dialogue with companies “in the spirit of partnership”, rather than a way to exercise pressure, it added.
Lombard Odier Investment Managers and Pictet were the only asset managers that, according to the study, have a systemic view to their stewardship approach, bundling long-term shareholders value with ESG addressing the issue of planetary boundaries.
AXA, Pictet, Raiffeisen, Swisscanto and UBS are among the asset managers listing their engaged companies, however overall stewardship reports of the asset managers fail to track engagement activities, the study added.
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