PLANADVISER - November/December 2021 - 16
trends
The Greening of Proxy Voting
ESBA's rule, making voting more transparent, will call for new adviser services
IN MID-OCTOBER, the Department of Labor (DOL)'s Employee
Benefits Security Administration (EBSA) proposed new rules
that put environmental, social and governance (ESG) factors
firmly back into fiduciary investment analysis.
The proposed rules discuss both the selection of " a plan
investment or investment course of action " and the " exercise
of shareholder rights, including proxy voting. " Put
simply, the proposal returns the proxy voting landscape to
where it was prior to actions taken by the Trump administration-meaning
plan fiduciaries may engage with the
proxy voting process as part of their normal fiduciary duties.
Sources say this is as it should be, as larger investment
managers and advisory organizations have made proxy
voting an integral part of their businesses. John Hoeppner,
head of U.S. stewardship and sustainable investments for
Legal & General Investment Management America, oversees
an 18-person team focused on stewardship activities.
His organization, which manages $1.8 trillion globally, takes
" very careful pains to have a highly bespoke custom strategy "
in voting proxies, Hoeppner says.
The situation is similar at other firms-Hoeppner estimates
that roughly 60% to 70% of the largest managers have
custom proxy voting guidelines. However, these firms might
also subscribe to proxy advisory services such as GlassLewis
or Institutional Shareholder Services (ISS), the owner
of PLANADVISER magazine. While a fund may state that its
in-house proxy team does not default to a service's voting
recommendations, the services nonetheless often have
considerable influence on voting patterns, he says.
Under the DOL's proposal, funds or asset owners
increasing their focus on ESG factors may require changes
in their proxy voting disclosures and guidelines, according to
Adam Shoffner, fund chief compliance officer at compliance
and technology firm Foreside. For example, an asset owner
that subscribes to a standard set of proxy advisory opinions
may need to update the type of proxy advice it receives.
Gabriel Alsina, head of Americas, Continental Europe
(ex-France) and global custom research at ISS, says ISS' benchmark
policy reviews environmental and social considerations
when providing voting recommendations in some situations.
ISS also offers specialty policies that focus on sustainability,
socially responsible investing (SRI) and climate.
The DOL's prior guidance had not diminished the importance
of ESG issues to institutional investors, says Alsina,
who adds that demand for environmental and social research
has increased. " E, S and G have become inseparable to most
16 | planadviser.com November-December 2021 Art by Tilda Rose
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PLANADVISER - November/December 2021
Table of Contents for the Digital Edition of PLANADVISER - November/December 2021
A Shift in the Tech Landscape
Strength in Diversity
Future Faces
A Workforce in Flux
Fee Models Are Shifting
Nonenforcement Policies
‘Window’ of Opportunity
PLANADVISER - November/December 2021 - Cover1
PLANADVISER - November/December 2021 - Cover2
PLANADVISER - November/December 2021 - 1
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PLANADVISER - November/December 2021 - 16
PLANADVISER - November/December 2021 - 17
PLANADVISER - November/December 2021 - A Shift in the Tech Landscape
PLANADVISER - November/December 2021 - 19
PLANADVISER - November/December 2021 - 20
PLANADVISER - November/December 2021 - 21
PLANADVISER - November/December 2021 - 22
PLANADVISER - November/December 2021 - 23
PLANADVISER - November/December 2021 - Strength in Diversity
PLANADVISER - November/December 2021 - 25
PLANADVISER - November/December 2021 - 26
PLANADVISER - November/December 2021 - 27
PLANADVISER - November/December 2021 - 28
PLANADVISER - November/December 2021 - 29
PLANADVISER - November/December 2021 - Future Faces
PLANADVISER - November/December 2021 - 31
PLANADVISER - November/December 2021 - 32
PLANADVISER - November/December 2021 - 33
PLANADVISER - November/December 2021 - A Workforce in Flux
PLANADVISER - November/December 2021 - 35
PLANADVISER - November/December 2021 - Fee Models Are Shifting
PLANADVISER - November/December 2021 - 37
PLANADVISER - November/December 2021 - Nonenforcement Policies
PLANADVISER - November/December 2021 - ‘Window’ of Opportunity
PLANADVISER - November/December 2021 - 40
PLANADVISER - November/December 2021 - Cover3
PLANADVISER - November/December 2021 - Cover4
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