ShareAction: European ETF issuers engage more than US counterparts on ESG issues

Legal & General Investment Management voted at 96% of shareholder resolutions, the most across all ETF issuers in the list of 60 asset managers

Tom Eckett

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European asset managers continue to engage more at shareholder resolutions on climate change and social issues, according to research conducted by ShareAction, partially driven by tougher regulation and legislation on this side of the pond.

The report, entitled Voting Matters 2020, found ETF issuers based in Europe were far more engaged when voting at 102 climate-related resolutions between September 2019 and August this year.

At these shareholder resolutions, Legal & General Investment Management scored the highest out of all ETF issuers voting at 96% of resolutions while Amundi voted at 89% and HSBC Global Asset Management engaged 82% of the time.

Other European ETF issuers also voted at shareholder resolutions such as UBS Asset Management, BNP Paribas Asset Management and DWS.

Lyxor was the exception with the French ETF issuer only voting at just 1% of the resolutions, the second lowest across all 60 asset managers measured.

US giants BlackRock and Vanguard were also in the bottom five having voted at 12% and 14% of climate resolutions, respectively.

Jeanne Martin, senior manager, banking standards, at ShareAction, and co-author of the report, commented: “Shareholder resolutions are an essential aspect of stewardship. They demonstrate clear asks and investor expectations to companies.

“Engagement through private meetings is important to gather information and build relationships but its effectiveness to enact change can be limited.”

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The report cited European legislation and regulation as a reason why asset managers this side of the pond have better voting records on ESG shareholder resolutions.

For example, the UK Stewardship Code 2020 requires signatories to “systematically integrate stewardship and investment, including material ESG issues, and climate change to fulfil their responsibilities”.

Martin added: “Effective stewardship is widely regarded as a driver of enhanced operational and financial performance.

“It helps to reduce risks and maximise returns at the individual investment level, as well as enhance overall market stability and maximise positive impacts on society and the environment more generally.”

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