Climate Action 100+ signers colluding? No way, says Morningstar

Critics have lobbed allegations of collusive proxy voting behavior against signatories of the Climate Action 100+ initiative, but a new analysis by Morningstar calls that into question.

The report from Morningstar comes after a string of high-profile withdrawals from the pro-environment coalition. Invesco, Pimco, State Street and JPMorgan have fully exited Climate Action 100+, while BlackRock has limited its participation to its non-US business.

Morningstar’s analysis delved into voting records for 20 climate-related resolutions in 2023, comparing levels of support from asset manager and asset owner signatories to CA100+ with that from nonsigners.

The analysis, which covered 50 signatories and 10 non-signatories, revealed institutional signatories of the Climate Action 100+ supported the resolutions at an average rate of 76 percent. In stark contrast, nonsignatories showed an average support rate of just 27 percent.

Breaking down the data further, signatory asset managers backed the resolutions with an average support rate of 74 percent, while their non-signatory counterparts in the US exhibited a much lower average support rate of 11 percent.

But the CA100+ asset managers seemed to diverge widely in their conviction on climate issues, with rates of support for the 20 resolutions ranging from 10 to 100 percent.

Asset owners who signed on to the initiative showed even more substantial support, with an average rate of 81 percent, compared to 43 percent from non-signatory asset owners.

“Proxy-voting records for the 20 flagged resolutions in 2023 suggest a wide range of voting approaches among CA100+ signatories, not collusion,” the report said.

Morningstar also analyzed the voting records of the withdrawing US asset managers. Within that group, support for the 20 climate-related resolutions stood at just 45 percent on average.

But individually, the CA100+ defectors showed wildly different levels of support, from BlackRock voting in favor of just 10 percent of the resolutions to Pimco backing 95 percent.

“Overall, the wide range of voting support by signatories and by the five exited and amended firms suggests that accusations of collusion by signatories are wide of the mark,” the report said.