Investor group issues 'urgent' call for asset managers to ramp up pass-through voting adoption
investmentweek.co.ukThe letter highlights a concerning misalignment between the voting behaviours of asset managers and their clients’ investment principles.
Tribe Impact Capital, Scottish Widows, London CIV and Smart Pension are part of a list of pension providers, endowments and wealth managers urging fund houses to allow asset owners to directly influence proxy votes in proportion to the AUM they have invested.
Pass-through voting is the mechanism by which investors in a pooled fund can vote their shares in proportion to the AUM they have invested, giving them a direct say in how the companies they invest in are run.
Pass-through voting tech to boost shareholder democracy among fund investors
«Asset managers wield significant influence over how public companies are run, and their actions impact corporate governance profoundly,» the letter stated.
«Globally, the data show that the three largest fund managers currently cast approximately 23% of the votes at companies in the S&P 500, a percentage projected to rise to 40% by the mid-2030s if current trends continue.»
The letter highlighted a misalignment between the voting behaviours of these managers and their clients' investment principles.
«Regrettably, we have continued to evidence a divergence between the voting behaviour of appointed asset managers, when compared with our investment principles and the expectations of our beneficiaries,» the letter added.
«This disconnect is especially noticeable regarding ESG issues, where some asset managers are regressing rather than progressing on their expectations of portfolio companies.»
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