On the go: Only a third of asset managers are able to provide details of how they have used their influence in voting as investors, according to new research.
Findings published on Monday showed trustees are being kept in the dark on investment oversight, according to Dalriada Trustees.
The research, which took place between September 2020 and February 2021, included data from 43 asset managers.
However, most asset managers included were unable to provide details of how they exercised voting rights or engaged with the companies in which they invest.
Only one-third (33 per cent) of the 43 asset managers were able to provide details of how they had used their influence in voting as investors, according to Dalriada’s service partner, Minerva Analytics.
Forty per cent of the managers included said there was no information to report, while 28 per cent provided no information whatsoever.
Voting rights have become increasingly important where companies need to be held to account to the extent that they meet environmental, social and governance goals, although they have always been important.
Research on engagement yielded similar results, showing that data required by the pension schemes from the asset managers was also lacking.
On the engagement front, only 23 per cent of the managers were able to provide detailed information, while a further 19 per cent provided partial information.
An additional 42 per cent of the managers provided no information on engagement, while 16 per cent said there was no information to report.
By law, an annual implementation statement is required from trustees of defined benefit, defined contribution and hybrid schemes that outlines voting rights, engagement with their investments, and policies on exercising rights.
David Fogarty, director with responsibility for investment, at Dalriada Trustees, said: “As trustees, we need to be able to show members what action we are taking in terms of voting and engagement on the assets we govern on their behalf.
“Yet, we are in a position where we are receiving insufficient information from the asset management community. We are seeing managers marketing funds for their ESG credentials, but they are failing to provide clear evidence of the actions being taken. Clearly, this needs to change.”
Dalriada’s research follows updated annual Stewardship and Voting Guidelines published by the Pensions and Lifetime Savings Association earlier this month.
In these guidelines, the PLSA focused on ensuring they remain relevant amid the challenges posed by Covid-19 and the current regulatory environment.
Pensions minister Guy Opperman commented: “It’s totally unacceptable that fund managers are unable or unwilling to respond to reasonable requests from pension funds for information on how their votes were cast.
“Pension fund trustees need this information to fulfil their statutory and fiduciary duties. Asset managers need to step up, use their votes and report efficiently. I will be closely monitoring progress.”
