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Big asset managers hampering ESG progress, says ShareAction

As European managers outpace their US and UK rivals when it comes to backing shareholder proposals

A report from ShareAction says that said European managers have raced ahead of their UK and US counterparts when it comes to ESG, saying there was a ‘clear regional divide’.

The organisation, in its Voting Matters 2022 report, pointed to the number of resolutions supported by European firms as opposed to those based in the US and UK.

It wrote: “European asset managers, on average, backed 81% of proposals in 2022 compared to 69% in 2021. This is in stark contrast to the US and UK where managers on average only showed a 1 percentage point increase. The average for the US and the UK hides dispersion in voting performance over time, with some asset managers greatly improving their voting performance while others deteriorated.”

However, ShareAction also said that progress on environmental and social issues is still being hampered by the world’s largest asset managers.

Among the other findings in its Voting Matters 2022 report, ShareAction says that the four largest asset managers—Vanguard Group, Fidelity Investments, BlackRock, and State Street Global Advisors—backed a far-lower proportion of shareholders proposals last year than they did in 2021. According to the organisation, Vanguard Group backed 10% of resolutions in 2022, down from 26% in the previous year; Fidelity backed 17%, down from 29%; BlackRock supported 24%, down from 40%; and State Street Global Advisors, 28% compared to 32%.

In addition, ShareAction says that nearly 50 resolutions would have received majority support if those four firms had thrown their weight behind them.

ShareAction write in Voting Matters 2022: “We found that 19% (49 of 252) of resolutions included in our analysis would have received majority support this proxy season if the three managers had voted in favour of them. Fifteen of these resolutions would have received majority support with support from just one of the three. These resolutions covered topics from racial equity and lobbying transparency to climate action.”

It added: “This is a notable increase from the 12% of resolutions (18 of 154) that would have received majority support with support from these three managers in 2021. This increase reflects, firstly, the growing outsized ownership of the BlackRock, State Street Global Advisors and Vanguard. Secondly, it reflects how the three voted in favour of fewer shareholder resolutions in 2022 than in 2021.”

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