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London, 5 January: Institutional investors are overwhelmingly failing to back shareholder resolutions on social and environmental issues, according to a new study. The study, carried out by VBDO (the Dutch Association of Investors for Sustainable Development) looked at the voting behaviour of seven major Dutch investors, including ABP, one of the world's largest pension funds, PGGM, a leading advocate of socially responsible investment, and banks ING and ABN Amro. The study analysed around 280 proposals submitted in 2005 by shareholders in the US – where it is traditionally easier to get shareholder resolutions considered at annual general meetings than in Europe. It found that the seven investors supported these resolutions in just 12% of cases. "In most situations, they vote against proposals in which companies will have to exert themselves in an environmental or social area," VBDO says. "VBDO knows that these institutional investors often agree with the contents of these proposals, but are reluctant to be open about it," says Piet Sprengers, managing director of VBDO. "When it concerns the direction of the management of a company or the rewarding of the management, these institutions are prepared to meet them head on," he adds. "When it comes to sustainability, the institutions suddenly become a lot more charitable and are unwilling to offend the management." The study looking at voting by PGGM, ABP, SPF, Robeco, Aegon, ING and ABN Amro. Robeco and ABN had the highest percentage of votes in favour of resolutions, at 32% and 30% respectively. SPF had the lowest, at just one vote in favour out of 89. However, VBDO notes that by no means all institutional investors disclose how they vote, or even necessarily vote on resolutions at all, so those "investigated ... are therefore a positive exception with regard to the exercising of their voting powers and the publicising of their voting behaviour."
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