BOSTON – The financial world increasingly understands that climate change will have far-reaching business impacts on a wide array of industries. And that’s translating into ever-growing support by many of the nation’s largest mutual funds in favor of climate-related shareholder resolutions filed with U.S. companies.
That’s the finding of this year’s fifth annual Ceres analysis of mutual fund votes by 46 leading mutual fund families collectively managing more than $5 trillion in assets. The analysis, “Mutual Funds and Climate Change: Growing Support for Shareholder Resolutions,” was jointly conducted with FundVotes.com, which has tracked U.S. mutual fund voting since reporting was first required in 2004.
As in past years, fund giants Fidelity and Vanguard lagged their industry peers by failing to support any climate-related resolutions in 2009. The survey also shows continued inconsistency in the wider industry’s handling of climate proxies, with different funds in the same fund families taking opposing stands on the same climate resolutions.
“We’re making progress in getting mutual funds to focus on climate change, but not enough of it,” said Ceres President Mindy Lubber. “Climate-related risks and opportunities should be apparent to all publicly-traded companies and to investors who own them.”
Fidelity and Vanguard proxy voting guidelines treat climate resolutions as “ordinary business matters” that should be considered only by management. Such guidelines imply that climate-related risks and opportunities are not material and will not impact long-term shareholder value.
That’s the wrong stance, said Lubber. “Climate risk is a quintessential bottom-line concern,” she said. “And when mutual fund companies vote against climate resolutions, it raises serious questions about whether they’re violating their fiduciary duty by not representing their customers’ long-term financial interests.”