Climate change: how asset managers use clients’ voting power to press Asia’s polluters to act
- Fidelity, State Street, Abrdn and Allianz are among the investors who are increasingly wielding their voting power to force companies to act against climate change
- Fidelity said it would engage with the investees for up to three years before considering divesting if it sees no prospect of increasing their transition potential
Asia’s listed companies face increasing scrutiny on their climate-related disclosure and commitments, as fund managers and institutional investors use their voting power to pressure them to act to mitigate effects on a warming climate.
Fidelity International, which manages US$663 billion of assets for 2.88 million clients, prioritises investees in energy and greenhouse gas emission-intensive sectors, from which the fund manager has sought disclosure of direct and indirect emissions and reduction targets.
For the 166 companies identified by investor-led initiative Climate Action 100+ to account for over 80 per cent of global industrial emissions, Fidelity has also demanded detailed mitigation plans aligned to pathways for reaching net zero emissions by 2050, key for the world to avoid the worst climate change impacts.
“Where companies have not shown alignment, we have voted against the chair or another suitable director,” said Fidelity’s director of sustainable investing Paul Milon. “In the few cases where no director was on the ballot, we elected to vote against other items such as board [duties] discharge or financial statements.”
In 2022, Fidelity’s first year of implementing its climate voting policy, it voted against responsible directors at 52 companies due to climate concerns, Milon said. Alternative actions were taken against seven companies where voting at director elections was not feasible.
