Monday, 21 April 2008

Climate change and shareholder voting

There is an excellent bit of research on the Ceres website here on how shareholders in the US vote on climate change resolutions. It is based on data compiled by Jackie Cooke who also runs the ace FundVotes website. The bit in the climate change voting analysis that really caught my eye was this:

Still, many mutual funds are acting inconsistently on climate change -- offering new climate-related funds and research products while continuing to oppose virtually all climate-related resolutions. The inconsistent behavior is especially apparent at Morgan Stanley, State Street Global Advisors and other Wall Street firms which are investing aggressively in new climate-related business activities, yet have opposed virtually all climate resolutions in recent years.

And in more detail further down:

Some mutual fund companies and related entities are boosting their climate-related business activity while still voting against climate resolutions. Examples include Morgan Stanley, whose mutual funds supported none of the 215 climate resolutions they faced from 2004-2007, and State Street Global Advisors, whose mutual funds have opposed all 54 resolutions they faced over the same four-year period.

You could read this in a number of ways. One is that Morgan Stanley and State Street see their climate change product offerings as a money spinner, but don't really buy that climate change matters an investmemt issue. Alternatively maybe they think voting in favour of climate change resolutions is a low-value bit of activity compared to specific products (and maybe there's some truth in that one). Or maybe there are simply different bits of the business not talking to each other.

Whichever it is, it's a strange position to be in. They risk reputational damage through surveys like this. You would have thought it would have been worth their while spending a bit of money to ensure that their proxy voting is aligned with what they are doing elsewhere.

VOTING DISCLOSURE MOAN ALERT!

Obviously we can't do anything similar to this research in the UK because so few managers disclose meaningful voting data.

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