A recent analysis of 2011 proxy voting patterns indicates that mutual funds -- with almost $12 trillion in assets under management and 35 percent of which is invested domestically -- are failing to acknowledge the financial relevance of climate change.
The three largest mutual fund companies -- American Funds, Fidelity and Vanguard, which manage a total of $1.6 trillion in U.S. securities -- did not vote in favor of a single resolution addressing climate change in 2011. American Funds voted against every climate-related resolution, while Fidelity and Vanguard each abstained nearly 90 percent of the time.
"The movement over the last few years by Fidelity and Vanguard from voting against all shareholder resolutions related to climate change to abstaining on most is a very small step in the right direction," Mindy Lubber, president of Ceres, said. "But it is also a very passive strategy that simply defers responsibility to management."
The proxy voting policies of the three largest mutual funds do little more than note that economic factors associated with environmental issues will be considered.
"These decisions should be the province of company management unless they have a significant, tangible impact on the value of a fund's investment and management is not responsive to the matter," the policy of Vanguard states.
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