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U.S. Mutual Fund Investors "Completely at Odds" With Fund Managers on Handling of Global Warming
U.S. Mutual Fund Investors "Completely at Odds" With Fund Managers on Handling of Global Warming
Published 01-27-06
Submitted by Ceres
The new Ceres report shows that while many of the nation's institutional investors are routinely supporting global warming resolutions, none of the nation's 100 biggest mutual funds -- including those managed by Fidelity, Vanguard and American Funds -- supported any of the 33 global warming resolutions filed with US companies in 2005. However, the new CSI survey shows that a clear of majority U.S. mutual fund investors want their mutual fund managers to vote in favor of the global warming resolutions and also to actively screen companies linked to climate change woes. (See full Ceres report and CSI survey data below.)
"Mutual funds investors and their their funds are completely at odds today on the topic of global warming," added Pam Solo, president of the Civil Society Institute, which polled 845 mutual fund investors on the issue. "Our new survey shows that 7 out of 10 American mutual fund investors want their mutual funds to screen companies linked to global warming and also to take action on shareholder resolutions calling on corporations to address climate change issues."
"Mutual funds are a critical missing link in the push for better corporate disclosure about climate risks," said Mindy S. Lubber, president of Ceres and director of the Investor Network on Climate Risk, which includes $3 trillion of institutional investors. "Mutual funds are ignoring the growing evidence that climate change will have far-reaching fiscal impacts on a wide range of business sectors, whether from rising insurance claims due to hurricanes and other natural disasters or growing worldwide demand for hybrid vehicles and other 'clean' technologies."
Today, Co-op America unveiled a Web-based action campaign at http://www.coopamerica.org/takeaction/mutualfunds, where mutual fund investors can go to urge the three largest U.S. fund families -- Fidelity, Vanguard and American Funds, which collectively manage over $1 trillion in assets -- to start voting in favor of global warming proxy resolutions.
"Mutual funds, which are responsible for the retirement investments of millions of investors, should be at the forefront of investors encouraging companies to address global warming," said Alisa Gravitz, executive director of Co-op America. "Instead, all of the largest funds of America's major mutual fund families -- including Fidelity, Vanguard and American Funds -- failed to vote in favor of any resolutions in 2005 encouraging companies to address global warming. Getting these funds to vote in favor of resolutions to address global warming would make a tremendous difference for investors and the environment."
KEY CSI SURVEY FINDINGS
The major new survey conducted by Opinion Research Corporation (ORC) for the Civil Society Institute focused on a sample of 845 U.S. mutual fund investors. The survey found:
KEY CERES REPORT FINDINGS
The Ceres-commissioned report, "Unexamined Risk: How Mutual Funds Voted on 2005 Climate Change Shareholder Resolutions" analyzes how the nation's 100 largest mutual funds voted their shareholder proxies on 33 climate change resolutions filed at the 2005 corporate annual meetings. The shareholder resolutions asked companies to disclose the financial risks and opportunities posed by climate change and, in some cases, their strategies for controlling greenhouse gas emissions. The report, prepared by the Investor Research Responsibility Center (IRRC), shows the following:
The results come as global warming shareholder resolutions have received record high voting supporting from investors in 2004 and 2005, including 28 percent shareholder support for a resolution filed last year with ExxonMobil asking the company to disclose the impacts of the Kyoto Protocol on its business. It was the highest vote ever on a climate resolution filed at ExxonMobil. Three of the nation's largest public pension funds which collectively manage over $400 billion in assets and the largest private pension fund, TIAA-CREF, all routinely supported global warming resolutions in 2005.
Doug Cogan, deputy director of social issues at IRRC, said: "This report finds that virtually none of the top 100 U.S. equity mutual funds are addressing climate change through affirmative proxy voting policies. Despite the rising financial stakes and significant actions taken by other institutional investors, mutual funds have shown a near-universal lack of interest in supporting climate change resolutions since the proxy voting disclosure requirements went into effect two years ago."
SURVEY METHODOLOGY
The ORC survey results were based on telephone interviews conducted among a sample of 2,034 adults (1,013 men and 1,021 women) age 18 and over, living in private households, in the continental United States. (Of this group, the bulk of the survey focused on the 845 self-identified mutual fund investors.) Interviewing was completed at ORC's Central Telephone Facilities during the period of January 5-9, 2006. Completed interviews were weighted by four variables: age, sex, geographic region, and race, to ensure reliable and accurate representation of the total adult population. The margin of error at a 95 percent confidence level is plus or minus two percentage points for the sample of 2,034 adults and plus or minus 3 percent for the subset of mutual fund investors. Smaller sub-groups will have larger error margins.
ABOUT THE GROUPS
The nonprofit and nonpartisan Civil Society Institute ( http://www.civilsociety.org) is a think tank that serves as a catalyst for change by creating problem-solving interactions among people, and between communities, government and business that can help to improve society. Global warming and U.S. energy policy are major policy focuses of CSI, which is the sponsor of the http://www.40mpg.org campaign.
Ceres ( http://www.ceres.org) is a national coalition of investors, environmental groups and other public interest organizations that workings with companies to improve their handling of sustainability issues such as global climate change. Ceres also directs the Investor Network on Clinmate Risk, an alliance of more than 50 institutional investors that collectively manage about $3 trillion in assets.
Co-op America ( http://www.coopamerica.org) is a not-for-profit consumer and investor education organization founded in 1982. It harnesses marketplace strategies to solve social and environmental problems, and mobilizes consumers and investors to encourage companies to improve their social and environmental responsibility.
EDITOR'S NOTE: Key CSI survey findings, the full text of the IRRC report, and a streaming audio recording of the Ceres/CSI news event will be available on the Web as of 4 p.m. ET on January 26, 2006 at http://www.civilsocietyinstitute.org and http://www.ceres.org.
Ceres
Ceres
Our Mission: Ceres is transforming the economy to build a just and sustainable future for people and the planet.
Ceres is a nonprofit organization working with the most influential capital market leaders to solve the world’s greatest sustainability challenges. Through our powerful networks and global collaborations of investors, companies, and nonprofits, we drive action and inspire equitable market-based and policy solutions throughout the economy to build a just and sustainable future. For more information, visit ceres.org and follow @CeresNews.
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