Guide for asset owners

Guide for asset owners

Actively encourage asset managers to seek votes on climate transition action plans

Asset owners should take the following actions to ensure their asset managers are actively seeking to secure annual shareholder votes on company climate transition action plans as standard:

1 Publicly endorse this concept your voice will help to ensure asset managers and companies realise this is increasingly recognised as good practice.
2 Adopt this practice in your investment policy to set a clear expectation that asset managers will vote to ensure companies adopt this practice
3 Write to your asset managers to formally ask them to update their own policies accordingly, and reflect this approach in your Investment Management Agreements
4 Hire climate-competent investment consultants to ensure your advice includes an assessment of whether asset managers have adopted this practice and their wider voting record on climate resolutions

Why should asset owners act?

  • Ensuring companies adopt a strong accountability mechanism for their climate change approach may help drive superior returns, and is in the long-term interest of clients
  • Fund trustees have a fiduciary responsibility to ensure the asset managers they choose are competent on climate change
  • Pension scheme beneficiaries increasingly expect their investments to be managed in line with their values, particularly in light of the climate crisis
  • Asset manager reporting on their annual voting record and rationale provides a strong supervision and alignment mechanism for asset owners.