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Super funds rejecting most shareholder ESG proposals

Super funds rejecting most shareholder ESG proposals

— 1 minute read

Most of Australia’s largest superannuation funds do not support the majority of shareholder proposals on environmental, social and governance issues, according to a new report, with less funds backing climate-related propositions in 2018 than the year before.

The Australian Centre for Corporate Responsibility (ACCR) found nine of the 50 largest superannuation funds supported more than half of the shareholder proposals on ESG issues that they voted on in 2018.

Three funds – Local Government Super, Vision Super and Cbus – supported more than 75 per cent of ESG related proposals. The other six out of the nine funds agreeing to a majority of ESG proposals were AustralianSuper, HESTA, Mercer, Tasplan Super, UniSuper and VicSuper.

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Only eight funds were reported to support 50 per cent or more of the climate-related shareholder proposals last year.

Dan Gocher, director of Climate and Environment, ACCR said most of the pitches from shareholders related to the disclosure of climate risk and setting emission targets.

“It is quite concerning that just nine of Australia’s fifty largest super funds have demonstrably supported a majority of ESG proposals in 2018,” Mr Gocher said.

“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.

“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.”

The ACCR reviewed the disclosure of funds’ proxy voting records and their voting behaviour on 260 shareholder proposals on ESG issues globally in 2018.

The report noted 11 out of the 50 funds disclose a complete proxy voting record, including all Australian and international shareholdings.

Mr Gocher noted that ASIC had also found disclosure remains poor across the sector responsible for $1.7 trillion of investments.

“Funds can no longer get away with only providing information to members on a ‘need-to-know’ basis,” he said.

“As the superannuation sector continues to grow, so do the demands for greater transparency and accountability.

“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.”

 

Super funds rejecting most shareholder ESG proposals
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Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah spent her career working in business-to-business media, including print and online, as well as cutting her teeth on current affairs programs for community radio. 

Sarah has a dual bachelor's degree in science and journalism from the University of Queensland.

You can contact her on [email protected].

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