Sustainability-focused investment funds at some of the world's largest asset managers — including BlackRock, Vanguard and SSGA — are still failing to take biodiversity and nature loss seriously, analysis of shareholder votes over the past 12 years indicates.
Planet Tracker said it found almost two-thirds — 62 percent — of votes cast by these funds on shareholder proposals relating to biodiversity since 2010 went against the proposal or were not voted on at all.
That is despite figures from the World Economic Forum revealing that as much as half of the world's GDP — or $44 trillion — being moderately or highly dependent on nature, the financial think tank pointed out.
Published last week, Planet Tracker's report analyzed almost 26,600 votes cast by over 7,700 funds on 38 proxy biodiversity proposals from shareholders between 2010 and 2022.
It found 38 percent of those votes went in favor of the biodiversity proposal, and 54 percent went against. In just 7 percent of those instances, more diligent funds provided the reasoning behind their voting decision, Planet Tracker said.
Of those sustainable investment funds that did disclose their rationale for voting against biodiversity-related proposals, their reasons included concerns that proxies were overly prescriptive — reported by 33 funds — that the company already reports on the issue at hand (32 funds), and that they felt there were insufficient shareholder benefits (31 funds). A further 28 funds said the company in question already had such a policy in place.
Planet Tracker said its findings demonstrated how major asset managers — and even through their sustainability-focused funds — were still failing to fully recognize the scale of the risk posed to their investments from inaction on halting and reversing biodiversity loss. It said it had found many companies had weak policy commitments on nature, or which had shown no evidence of meeting previously set targets.
"It's disappointing to see financiers, particularly those who define themselves as sustainable, continuing to overlook biodiversity and not using their financial might to protect nature," said John Wills, director of research at Planet Tracker. "With asset managers favouring engagement over divestment as an approach in transforming corporate behavior, funds must step up and support important biodiversity proposals, or provide justification for their voting decision."
Deeper analysis of three of the world's five biggest global asset managers — BlackRock, Vanguard and SSGA — found that despite public commitments to sustainable investing, their sustainability funds voted against biodiversity proposals between 80 and 100 percent of the time, and none recorded the rationale behind their voting, Planet Tracker added.
While the report found that most sustainability and ESG funds in the study supported biodiversity proposals — 76 percent indicted their support, which is around double the proportion of other fund types — overall they only made up 3 percent of the votes, and as such had little impact on the outcome of the vote.
In addition, the report found that around 20 percent of sustainability funds voted against biodiversity-related proxies, which it said gave shareholders a reason to question whether they are being missed.
