Brunel Pension Partnership will invite asset managers to meet the UK Asset Owner Roundtable and discuss how they approach proxy voting. The local government pension pool is concerned managers are putting short-term profits before pension fund beneficiaries’ long-term interests.  

A formal invitation will be sent out in the coming weeks to confirm the date and venue for the meeting.  

Brunel, one of the eight local authority investment pools, will also commission a review by a leading academic of the way significant asset managers have interpreted their clients’ long-term interests when exercising their stewardship duties, said Faith Ward, chief responsible investment officer, and Simon Wood, head of listed markets. Ward chairs the UK Asset Owner Roundtable. 

 

“We are concerned at a perceived misalignment between our long-term interests and how investment managers are exercising proxy voting at key annual general meetings of European oil and gas majors,” the letter sent to Brunel’s asset managers reads. 

 

“Specifically, UK asset owners are concerned that despite unequivocal warnings from the United Nations and the [Intergovernmental Panel on Climate Change] of the risks of delayed action on climate change, short-term interests are trumping long-term interests of pension funds,” it adds, citing the risk of a disorderly transition and missing the Paris Agreement goal. 

 

Brunel said that “the meeting is intended to be a constructive dialogue to support UK asset owners and to ensure that our needs are effectively understood by the managers we select on behalf of our members and the beneficiaries we serve”. 

 

At this year’s AGM season, several pension fund investors have voted against the directors of major oil and gas companies. The Universities Superannuation Scheme, Brunel, Border to Coast, LGPS Central and Nest all voted against the reappointment of BP’s chair Helge Lund at the firm’s last AGM. The Church Commissioners, which manage the Church of England’s £10bn endowment fund, said they would vote against all directors of Exxon, Occidental Petroleum, Shell and Total, citing a “failure to meet climate change objectives”. Similarly, the Church of England Pensions Board has said it plans to vote against the chair of Shell. Nest and the London CIV have also said they would vote against Shell’s directors. 

 

However, an attempt by campaigners ClientEarth, supported by Nest and the London CIV among others, to bring a legal claim against the directors of Shell was denied the go-ahead by the High Court last Friday. 

 

    

Are asset managers putting short-term profits before an orderly climate transition?