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AUM in Action

Asset Owner-Manager Roundtable Seeks to “Bridge Gap” on Misalignment

The ‘Asset Manager-Asset Owner Aligning Expectations’ roundtable convened at the London Stock Exchange on Thursday to address the growing concerns surrounding investor voting activities within the oil and gas sector. The event, opened by Faith Ward, Chief Responsible Investment Officer at Brunel Pension Partnership and Chair of the UK Asset Owner Roundtable, aimed to shed light on the perceived misalignment between long-term interests and investment managers’ exercise of proxy voting. “We need to bridge the gap between asset owners’ expectations and asset managers’ voting activities, particularly in the ‘complex’ oil and gas industries responsible for 80% of greenhouse gas emissions.” The event facilitated an exploration of both the practical challenges contributing to this misalignment and potential solutions. This initiative coincided with bespoke research conducted by Andreas Hoepner, Professor of Operational Risk, Banking and Finance at University College Dublin. Hoepner’s research indicated that misalignment was prevalent between asset owners and asset managers, with larger and broader asset managers exhibiting greater disparities. It also highlighted that misalignment was more pronounced concerning shareholder resolutions compared to management resolutions, especially concerning US issuers. However, specialist asset managers demonstrated higher correlation on shareholder resolutions, while some generalists significantly deviated. Participants expressed clear recognition of the issue and a sense of shock regarding its deep implications. They collectively emphasised their commitment to enhancing communication and transparency. “Today has been a really positive starting point for an essential and ongoing dialogue,” added Ward. “We have identified some practical steps to ensure we better inform and support fund managers in delivering against asset owners’ climate stewardship strategies.” The final report, incorporating the insights from the roundtable, will be released later this year. 

 

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