Cazenove Capital sets out voting best practice for asset managers

Schroders-owned wealth firm pens six-point letter to 93 asset managers overseeing £30trn AUM

Wealth manager Cazenove Capital has written to 93 asset managers on its approved fund list to set out its view on voting best practice at annual general meetings (AGMs).

Together, the asset managers represent more than £30trn of assets under management.

In the letter, Cazenove put forward six recommendations for voting best practice, which it said would ensure the industry takes demonstrable action on sustainability and ESG, rather than just talking about it.

The six points are:

  1. Publishing voting policies and voting records – in an accessible format and in a timely manner.
  2. Committing to voting on resolutions at all AGMs/EGMs (except where restricted).
  3. Publicly pre-declaring voting intentions for important and/or more controversial ESG shareholder resolutions.
  4. Intelligently using votes to support environmental and social shareholder resolutions. We do not expect votes for all ESG resolutions, but where such resolutions are not supported we ask that rationales for voting decisions are published.
  5. Using voting as a form of escalation where companies are failing to make sufficient progress on ESG issues.
  6. Using voting against company directors as a form of escalation where companies are deemed to be climate laggards.

Together with Schroders Wealth Management, Cazenove is responsible for £62bn assets, £29bn of which is invested in collective investment funds. The firm said this puts it in a ‘powerful position’ to drive change through the industry.

Chloe Mallo (pictured), Cazenove Capital investment manager, said: “Fund managers should be using their votes to hold the underlying companies in which they invest to account on ESG issues. Our letter clearly sets out our interpretation of best practice. We have committed to this approach for the investments we hold directly on behalf of our clients. We encourage managers that we work with to do the same.”

Stuart Derrick, head of management selection and co-signatory of the letter, added: “ESG considerations are central to our fund selection process. We would encourage all managers to follow these voting principles, irrespective of whether or not they are managing an ESG or sustainable fund.”

This article first appeared on ESG Clarity’s sister title Portfolio Adviser.