Sustainable Voting Behavior of Asset Managers: Do They Walk the Walk?

Abstract

We investigate asset manager characteristics that influence ESG voting patterns using a decade of voting data with more than 20 million observations. Asset managers predominantly vote against social and environmental proposals. Especially, large and passive asset managers vote the least in favor of these proposals and despite the increased attention to sustainability integration, they hardly vote more in favor of these proposals than a decade ago. Moreover, signatories of the PRI do not vote more often in favor of environmental and social issues. Our results have important implications for investors striving for direct impact on the sustainability agenda of corporates.

Keywords: Voting, Sustainability, Responsible Investing, ESG, Governance, Active ownership, Asset managers, Passive, Active, PRI, Mutual funds

JEL Classification: G10, G32, Q56