European asset managers are outdoing US asset managers regarding the detail and the specifics of climate policies, according to a study by Morningstar.
The study, which examined the voting policies of 25 asset managers in Europe and the US representing in total $55 trillion of assets under management, rated asset managers on their ESG proxy-voting policies from ‘Low’ to ‘Very High’.
Morningstar found that of the 13 European asset managers it analysed, nine of them had a ‘High’ or ‘Very High’ E&S focus, meaning they tended to include specific and detailed policies on several aspects of climate policy.
In comparison, 11 of the 12 US asset managers Morningstar analysed had a ‘Medium’ or ‘Low’ focus.
The study found, however, that overall asset managers are adding more clarity to their policies on features of E&S proposals they will and will not support, which in turn is helping investors make better-informed choices about manager selection.
Of the asset managers Morningstar studied, Allianz Global Investors, BNP Paribas Asset Management, Fidelity International, and Legal & General Investment Management had the greatest focus on E&S issues in their voting policies.
Meanwhile, BlackRock, State Street and Vanguard – the big three index managers – all were found to have a ‘Medium’ focus.
Those in the ‘Low’ category included Fidelity Investments, Franklin Templeton and Invesco.
Morningstar’s study comes as shareholder resolutions reached 250 in the 2022 proxy season, substantially up from the 145 recorded in 2021.
Among the environment-related issues covered by asset managers, climate was the most common. However, biodiversity, deforestation and water use are becoming more prominent in ESG proxy voting, the study found.
Regarding social-related issues, diversity, equity and inclusion (DEI) was found to be the most common topic. These covered issues from board level to the general workforce.
The study found that human capital management issues, human rights and labour rights were also often covered.
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