Big US fund managers that have promoted their credentials in tackling sustainability issues have done little to support environmental and social shareholder proposals, their voting records reveal.
During the 2019 shareholder voting season, funds labelled by BlackRock, JPMorgan Asset Management and Vanguard as sustainable frequently sided with a company’s management and against shareholder proposals on issues ranging from political spending to diversity disclosures, according to new reports filed with the US Securities and Exchange Commission.
The data come as environmental, social and governance (ESG) funds have drawn fire for the companies they hold. The Financial Times reported in July that Vanguard was holding oil and gas companies in an ESG fund it claimed was fossil free. The manager later reviewed its ESG funds and ejected a gun manufacturer, a private prison operator and other businesses. Vanguard said the problem was due in part to an indexing error.
The voting data raise new questions about whether social and environmentally conscious investors’ expectations are being met as they pour billions of dollars into ESG funds. A handful of BlackRock and Vanguard ESG funds have scooped up more than $1bn of assets.