Asset managers claim to have voting policies on ESG issues, but more than a third of them do not provide specific voting commitments, according to a report from ShareAction’s Point of No Returns series.
Among the 77 asset managers interviewed worldwide, 14 firms did not disclose any climate-related voting commitments while a further 13 have no reference to climate at all in their voting policies.
The deficiency is more serious in the Asia Pacific region, with only two out of the 13 asset managers providing specific climate voting commitments, compared with 77% and 72% of the asset managers based in the US and Europe respectively.
Nevertheless, there are 60 global asset managers reporting that their voting policy covered climate change in 2022, 25 firms more than ShareAction’s last report in 2020.
“A clear and detailed public voting policy is a key part of a good stewardship approach. It provides transparency for stakeholders, enabling asset owners and other clients to check adherence to particular principles,” the report said.
Apart from environment issues, the report also seen an increase in asset managers’ social issues and biodiversity engagement in 2022 compared with 2020.
In comparison with the 2020 result, asset managers reported that their voting policy covered social issues such as human and labour rights jumped to 81% in 2022 from 53%.
However, 36% of the surveyed asset owners failed to reference specific voting commitments on social issues, the report found.
When broken down according to region, 95% of US asset managers have a social voting policy in place, followed by European managers (82%).
Only 54% of Apac managers, on the other hand, reported a similar policy, according to the report.
Asset managers’ voting policies and disclosures vary between regions
|% with voting policy||Climate||85%||91%||62%|
|% disclosing votes quarterly or more frequently||77%||64%||31%|
Apart from voting policies, Asian managers also reported less transparency compared with their global peers.
Five of the surveyed asset managers still did not publish their voting records, and four disclosed only to clients and all of them were based either in the US or Asia Pacific.
While 77% of the asset managers in Europe and 64% of those in the US disclose their voles quarterly or more frequently, only 31% of the Asia Pacific managers do so.
Yet, there is an improvement in disclosure worldwide, with 88% of asset managers disclose their voting records publicly, up from around 55% in 2020.
The Apac region has recently stepped up finance disclosure to make progress in ESG regulations. In late February, the Australia government closed a consultation to mandate climate-related financial disclosure as a tool to manage the material risk of climate change, provisionally from the 2024/25 financial year.
Moreover, the International Sustainability Standards Board set up a satellite office in Beijing to coordinate its work throughout Asia in January.