22 May 2019
Today the Australasian Centre for Corporate Responsibility (ACCR) released a report on the proxy voting behaviour of Australia’s 50 largest super funds in 2018.
ACCR reviewed the disclosure of funds’ proxy voting records and their voting behaviour on 260 shareholder proposals on environmental, social and governance (ESG) issues globally in 2018.
- Just 11 of the 50 largest funds disclose a complete proxy voting record, including all Australian and international shareholdings.
- Only nine funds supported more than 50% of the shareholder proposals on ESG issues that they voted on globally in 2018. Three funds — Local Government Super, Vision Super and Cbus — supported more than 75% of the shareholder proposals on ESG issues.
- Only eight funds supported 50% or more of the climate-related shareholder proposals that they voted on in 2018. Numerous funds supported more climate-related shareholder proposals in 2017 than they did in 2018.
The report makes several recommendations related to the transparency of proxy voting and urges funds to support all reasonable shareholder proposals which seek to remedy clear ESG deficiencies within companies.
Dan Gocher, Director of Climate and Environment at ACCR, said:
“It is quite concerning that just nine of Australia’s fifty largest super funds have demonstrably supported a majority of ESG proposals in 2018. Most of these proposals are reasonable asks of companies, and often broadly align with most funds’ stated ESG principles. Despite claims from many funds that they are ‘ESG aware’, there is still widespread reluctance to support sensible shareholder proposals on these issues.
“Cbus, Local Government Super and Vision Super have clearly demonstrated that their voting is consistent with their responsible investment policies. The other six funds that supported a majority of ESG proposals — AustralianSuper, HESTA, Mercer, Tasplan Super, UniSuper and VicSuper — should also be commended on their strong voting records.
“Sadly, despite growing investor concern about climate change, just eight funds supported a majority of climate-related proposals in 2018. Most of these proposals relate to the disclosure of climate risk and setting targets for reducing emissions. Funds are running out of valid excuses for not supporting proposals of this nature, particularly when groups like the Investor Group on Climate Change (IGCC) are making similar demands of companies. ACCR urges all funds to support shareholder proposals at Chevron and ExxonMobil on 29 May.
“As ASIC itself found, disclosure across the sector remains shamefully poor. It is quite incredible that in a sector responsible for $1.7 trillion of investments, just 11 funds disclose a complete proxy voting record. We urge both regulators and investor bodies like the Australian Council of Superannuation Investors (ACSI) and the Financial Services Council to ensure that funds improve their disclosures to members.
“Funds can no longer get away with only providing information to members on a ‘need-to-know’ basis. As the superannuation sector continues to grow, so do the demands for greater transparency and accountability.”
The report can be found at: https://accr.org.au/vote-like-you-mean-it-report/