Large fund firms' support for combating climate change is all talk, as proxy voting record shows bottom performance
Climate change questions don't get more fundamental than this one: How much time is left to act before it is too late?
"Larger mutual funds companies, like Vanguard, Fidelity, BlackRock and State Street Global Advisors, can move the market," said Mindy Lubber, CEO and president of Ceres, a nonprofit organization that works with big investors and companies on sustainability."They can take a shareholder resolution from 10 percent to 40 percent."
"It is unfortunate that the biggest firms are at the bottom of the list," Lubber said."When they vote proxies, as they did on Exxon, the votes changed substantially and the conversations do get started, at least." Vanguard pointed to its Investment Stewardship report, which listed engagements with more than 700 portfolio companies, 200 of which are involved in carbon-intensive industries.
Jackie Cook, a specialist in corporate environmental, social and governance disclosure analysis and founder of FundVotes, which was acquired last year by Morningstar, said the"engagement first, voting later" rationale doesn't add up, because there is no reason why these companies can't do both. And the engagements suffer from a lack of transparency."There is no standard disclosure structure," Cook said."No one shows any granularity to the engagement. ...
A report Cook published for Morningstar last Friday found something else disappointing. Socially responsible funds specifically created by these managers to target issues such as climate change don't always vote in support of climate resolutions, either. The BlackRock Impact U.S. Equity voted against three greenhouse-gas and climate change shareholder proposals in 2018, including two that called for greater greenhouse-gas disclosure from oil and gas companies Chevron and Range Resources.
Tim Smith, director of ESG shareowner engagement at Walden Asset Management, which has specialized in socially responsible investing and shareholder advocacy for decades, said there is a disconnect between BlackRock CEO Larry Fink's words on corporate stewardship and his firm's actions.
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