{"id":23122,"date":"2022-05-18T22:10:39","date_gmt":"2022-05-18T22:10:39","guid":{"rendered":"https:\/\/share.ca\/?p=23122"},"modified":"2022-06-02T21:24:05","modified_gmt":"2022-06-02T21:24:05","slug":"ccsn-vote-results","status":"publish","type":"post","link":"https:\/\/share.ca\/blog\/ccsn-vote-results\/","title":{"rendered":"Votes for decent work: Canadian investor voting results from 2021"},"content":{"rendered":"\n\n
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By Hugues Letourneau and Gabriela Ruiz<\/p>\n

This report was originally published by the Canadian Capital Stewardship Network<\/a>.\u00a0<\/em><\/p>\n

Investors have been facing demands to deepen their commitments to the \u201cS\u201d in ESG. Amid a global pandemic, momentum to act on Indigenous reconciliation, widespread awareness of the Black Lives Matter movement, and the continued growth of income inequality, we look at whether this pressure has led to voting action at company AGMs.<\/span><\/span>\u00a0<\/span><\/h3>\n

Proxy voting season is an opportunity to analyse how investors have responded to this pressure, as it provides metrics on vote casting at corporate annual general meetings (AGMs) regarding issues like decent work, fundamental labour rights, and racial equity. Last year, <\/span><\/span>Morningstar<\/span><\/span><\/span><\/a> reported that average support for shareholder resolutions rose to a record 34% in the 2020\/2021 season, indicating a positive trend. This year, investors are facing even more scrutiny on proxy voting, with U.S.-based investor research organization <\/span><\/span>As You Sow<\/span><\/span><\/span><\/a> reporting a 20% increase in ESG resolutions appearing on proxy ballots, with over 300 resolutions filed.<\/span><\/span>\u00a0<\/span><\/p>\n

As the 2022 proxy season unfolds, the Canadian Capital Stewardship Network (CCSN) is conducting a baseline analysis of proxy voting transparency from Canada\u2019s five largest institutional asset managers and five largest pension fund managers. In addition, the analysis investigates their support for decent work, racial equity and worker rights issues on proxy ballots from 2021. The CCSN analyzed voting at 10 companies either headquartered in Canada (e.g., Dollarama, Loblaw) or with a significant employment footprint in Canada (e.g., Amazon, McDonalds). The aim is to be able to evaluate the 2022 proxy season in the context of last year\u2019s voting, and assess how Canadian investors compare to their global peers.<\/span><\/span>\u00a0<\/span><\/p><\/blockquote>\n

On the proxy voting transparency front, the research demonstrates that Canada\u2019s top five pension fund managers perform better than Canadian asset managers in terms of pre-AGM proxy voting disclosure and in the publication of proxy vote rationales.<\/span><\/span>\u00a0<\/span><\/p>\n

Regarding proxy voting records on decent work-related issues, research demonstrates that Canadian asset managers are beginning to understand the importance of using proxy votes as an accountability tool for social issues. It also indicates that Canadian pension funds are increasingly sensitive to social issues, as evidenced by their voting rationale in support of key resolutions. While Canadian investors supported votes on Indigenous issues and reconciliation, racial equity, human capital disclosure and board accountability, they were less inclined to support issues linked to stakeholder capitalism, such as the inclusion of workers on boards.<\/span><\/span>\u00a0<\/span><\/p>\n

Room for improvement: Transparency on proxy voting<\/strong><\/h3>\n

A growing number of Canadian investors are publishing their voting intentions on key proxy votes ahead of a company\u2019s AGM. In addition to improving the transparency of ESG <\/span>stewardship, this tactic enables companies to have insight into investor sentiment around the timing of the AGM.<\/span><\/span>\u00a0<\/span><\/p>\n

Sharing voting intentions with the public domain can also create a \u201cbuzz\u201d around a specific resolution and tip the balance in favour of majority support for a shareholder resolution. This practice is gaining adherents among Canada\u2019s largest pension funds, but it is still rare amongst large Canadian asset managers. Three out of the five largest Canadian pension fund managers have taken to pre-declaring their votes on their websites while none of the top five asset managers have done so.<\/span><\/span>\u00a0<\/span><\/p><\/blockquote>\n

The most common practice amongst the top five asset managers\u2019 mutual funds regards adhering to Canadian regulation (National Instrument 81-106) and disclosing their voting records on an annual basis for the period ending on June 30 of each year (e.g., Manulife IM, CC&L & Fiera).<\/span><\/span>\u00a0<\/span><\/p>\n <\/div>\n\n <\/div>\n <\/div>\n