ShareAction’s Voting Matters report shows that asset manager votes for ESG resolutions increased from 60% in 2021 to 66% in 2022.

The report shows that 68 of the world’s largest asset managers voted on 252 shareholder resolutions to address ESG issues. Key findings include:

• Overall votes for environmental and social resolutions increased from 60 per cent in 2021 to 66 per cent in 2022, though support from asset managers in the US and UK remains stagnant, with significant increases only seen in Europe.
• 49 additional resolutions addressing urgent environmental and social issues would have received majority support if three of the largest asset managers had voted for them;
• The four largest asset managers in the world voted for significantly fewer climate and social resolutions than they did in 2021;
• Members of the Net Zero Asset Managers Initiative (NZAMi) and Climate Action 100+ (CA100+) failed to back a third of climate resolutions on average;

Claudia Gray, Head of Financial Sector Research at ShareAction said: “Most of the world’s largest asset managers are not consistently using their voting rights to address the multiple environmental and social crises the world is facing. Asset managers must strengthen their voting policies, ideally through a commitment to ‘comply or explain’, meaning default support for resolutions with positive environmental and social impacts, and issuing a public explanation when votes are not cast in favour”.

On average, the four largest asset managers (BlackRock, Vanguard, Fidelity Investments and State Street) supported 20 per cent of resolutions, compared to 32 per cent in 2021. Importantly, all four voted more conservatively than the world’s largest proxy voting advisors Institutional Shareholder Services (ISS) and Glass Lewis who recommended voting in favour of 75 and 42 per cent of resolutions in the dataset respectively.

Though some asset managers cited the increased number and lower quality of resolutions in 2022 as the reason for the decline, the report notes the importance of the high-profile ESG backlash taking place in the US as well as the evolution of resolutions from more straightforward disclosure asks to addressing the urgent issue of executing the energy transition.

There is a clear regional divide in asset manager voting behaviour: European asset managers backed on average 81 per cent of proposals in 2022 compared to 69 per cent in 2021. US and UK asset managers on average showed only a 1 per cent increase.