ESG engagement pressure on Asia asset owners builds as managers retreat | ESG
The engagement of world s leading investment managers with ESG issues in the Asia-Pacific region is declining, as per recent data from BlackRock and Vanguard. This trend is putting more responsibility on asset owners to establish specific engagement policies for proxy voting. Deborah Fuhr, managing partner of ETFGI, highlighted that governance committees within asset owners are deciding on the types of issues they will vote on during proxies. Vanguard s lack of support for environmental and social shareholder proposals in Japan, and BlackRock s alignment with management on all shareholder environmental and social proposals in APAC, indicate potential future behaviors of other managers. The majority of environmental and social shareholder proposals in Japan focused on climate risk management in utilities, materials, and financial sectors. Japanese companies generally provided reasonable disclosures on climate risk management, likely due to regulatory changes in 2023. The pressure on asset owners to intensify their engagement with investee companies is increasing. Large asset owners in APAC are expected to prioritize ending the coal, oil, and gas expansion plans of investee companies to reduce global emissions. However, most Australian pension funds are failing to manage climate risk effectively and must undertake more forceful stewardship efforts. The declining support for shareholder proposals is evident in Vanguard s data, which shows a significant drop from 46% in 2021-2022 to zero in the current year. BlackRock s support for environmental and social measures worldwide was only 4%, compared to a median market support of 13%. The number of environmental or social proposals from shareholders that BlackRock deemed too prescriptive increased to 31% in 2023-2024 from 25% in 2021-2022. In summary, the engagement of investment managers with ESG issues in the Asia-Pacific region is waning, increasing pressure on asset owners to establish specific engagement policies. The declining support for shareholder proposals and the need for more forceful stewardship efforts to manage climate risk are also evident. Lar
Source: asianinvestor.netPublished on 2024-09-15
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