Friday, 23 January 2015

When unions meet capital markets...

Anyone interested in the capacity for trade unions to mobilise the capital sitting in our pension funds should take a look at the Global Proxy Review produced by the Committee on Workers' Capital. The Review is intended as a tool for trade union trustees to bring accountability into the investment chain.

Already unions in a number of countries carry out their own surveys of how asset managers vote on key issues each season. The CWC review is intended to provide a global overview, something that is increasingly necessary given that in a number of countries our pension funds' equity portfolios have a significant overseas element.

There is some useful commentary, too, about the problems that trustees face when they invest via pooled funds. From what I've heard, this is an issue that has cropped up in a number of markets. We all face the same problem, but it can be overcome. It is entirely possible for managers to vote a pro-rata holding, but trustees need to argue for this to happen.

Anyway, below is some more info on the Review from the CWC site. It is well worth taking the time to have a look at the Review and online resources.

The 2014 Review provides an analysis of 44 key proxy votes that raised environmental, social and governance (ESG) issues at corporations likely to be held in the global equity portfolios of pension funds. In this year’s report, highlights include:
• Key vote analysis suggesting a higher likelihood for shareholders to vote against management in the USA, the UK, Canada and Australia than in Continental Europe and South Africa;
• A section highlighting challenges related to proxy voting guidelines in line with best practice over ESG issues in pooled funds;
• The participation of nine countries, including the addition of France as a contributor.
The Global Proxy Review is a pension trustee’s guide to key shareholder votes at multi-national companies across the globe. With this oversight tool, trustees and investors can evaluate the performance of fund managers or proxy voting services on the most important environmental, social and governance issues of the year.
Access to the 2014 Report (EnEsFr) and media release.
To access previous reports and partner resources, click here   

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