The ‘indispensable’ way investors can challenge companies
Proxy voting is an ‘indispensable’ way investors can influence companies and industries on environmental, social and governance (ESG) practices, according to Calvert Research and Management.
Calvert, an affiliate of asset manager Eaton Vance, said an investment firm’s proxy-voting record, votes cast on behalf of its investors, was a good indicator of how engaged a company was on critical ESG issues and how important responsible investing was to them.
Votes could cover issues such as climate change, remuneration, use of renewable energy and governance.
Shirley Peoples, AVP & Shareholder Engagement Assistant Manager at Calvert, said: “We believe proxy voting is an indispensable shareholder tool and responsibility and is one of the most effective ways to move companies and industries towards more responsible ESG practices.”
Investors should not automatically assume that their investment will take part in proxy voting either; according to Morningstar, it found many large investment firms such as BlackRock and Vanguard voted against climate change proposals such as disclosing sustainability efforts despite running sustainable funds.
“While there may be valid reasons for voting against a specific ESG proposal, such as unnecessarily onerous reporting requirements if a company already reports significant metrics, investors need to keep a watchful eye on whether their ESG funds are voting according to their sustainability objectives,” Peoples added.
AUTHOR
Laura Dew
Recommended for you
Infrastructure assets are well-positioned to hedge against global uncertainty and can enhance the diversification of traditional portfolios with their evergreen characteristics, an investment chief believes.
Volatility in US markets means currency is becoming a critical decision factor in Australian investors’ ETF selection this year.
Clime Investment Management is overhauling the selection process for its APLs, with managing director Michael Baragwanath describing the threat of a product failure affecting clients as “pure nightmare fuel”.
Global X will expand its ETF range of exchange-traded funds next month with a low-cost Australian equity product as it chases ambitions of becoming a top issuer of ETFs in Australia.
