Climate-change risk is increasingly on the radar of Canada’s biggest institutional investors. But their recent voting records show differences in their approach to shareholder proposals involving climate issues.
According to a new report from the Vancouver-based Shareholder Association for Research & Education (SHARE), a review of the proxy voting records of eight big Canadian pension funds and 10 large asset managers for the 2017 proxy season finds that climate change is “high on the agenda of significant Canadian investors.”
The study also unearthed “important differences” in these firms’ climate voting records. Based on a review of 21 proxy votes that SHARE examined, the asset managers with the strongest support for climate-related shareholder proposals include “RBC Global Asset Management, Manulife, BMO Global Asset Management and TD Asset Management, while Scotiabank and BlackRock are trailing.”
Regarding pension funds, SHARE says, the list of investors demonstrating strong support for climate-related proposals includes OPTrust, British Columbia Investment Management Corp., Canada Pension Plan Investment Board, AIMCO, and Caisse de dépôt et placement du Québec.
SHARE says that shareholder proposals on climate issues include calls for companies to report on the expected impact of meeting global emission reduction targets, to improve disclosure, and to undertake targeted emissions reductions. The group adds that these sorts of proposals are winning strong support from shareholders— for example, 62% at a recent Exxon Mobil vote.
SHARE stresses that its survey represents a snapshot of shareholder voting on climate issues in the latest proxy season: “It is not a full picture, as, currently, investment funds are not required to disclose publicly how they exercise their proxy votes, so the data in the survey are taken from the websites of investment funds that voluntarily disclose their voting record.” The survey also excludes instances in which climate issues don’t proceed to a vote because the company agreed to measures requested by shareholders.
“Investors differ in how they mix proxy voting and direct engagement, and in their rationale for voting a particular way,” the report adds. “Some will not support resolutions if they believe companies are making measurable improvements in addressing greenhouse-gas emissions or implementing effective climate risk management strategies.”
So, while the Ontario Municipal Employees Retirement System and Ontario Teachers’ Pension Plan had the lowest level of support for voting in favour of climate proposals in the 2017 proxy season, SHARE says, Teachers, “is engaging with corporate boards on climate change and is, along with some of its peer funds, recognizing that its fiduciary obligation includes carefully assessing climate-change risks, emphasizing to companies the importance of managing climate change risks and developing solutions, and investing in clean energy and innovative technologies such as carbon capture and storage.”