Florida’s attorney general has filed a lawsuit against ISS and Glass Lewis, alleging the proxy giants have violated Florida’s consumer protection and antitrust laws “by deceiving investors, coordinating their services, and steering corporate governance in ways disconnected from financial performance”. In a statement, James Uthmeier claimed that, while Glass Lewis and ISS claim to be neutral advisers, “they use their near-total control of the proxy-voting market to push divisive political mandates that threaten retiree savings, distort corporate governance, and undermine the rule of law”.
A spokesperson for ISS told Responsible Investor that the firm is reviewing the complaint and will respond in court in due course. “We believe the allegations lack merit and will vigorously defend against them. ISS’s job is to provide sophisticated institutional investor clients with independent, timely, and expert research and vote recommendations based on the proxy voting policies the clients have selected or customised based on their determination of the best interests of the beneficiaries they serve.”
A spokesperson for Glass Lewis said: “The suggestion that Glass Lewis violated any Florida antitrust laws or fair trade practices is categorically untrue. Our clients are sophisticated institutional investors that make their own proxy voting decisions. We look forward to presenting the facts through the legal process.”
Both asset owners and managers expect the proportion of sustainable assets under management to rise over the next two years, according to the Morgan Stanley Institute for Sustainable Investing’s latest sustainable signals survey. The bank polled 900 global institutional investors who already have some sustainable assets or plan to do so. Seventy-nine percent of asset manager respondents and 86 percent of asset owner respondents said they expect their proportion of sustainable investments to rise. The most popular reason for increasing allocations was strong performance at 22 percent, followed by increasing maturity of sustainable investing, and the fact that sustainable themes offer exposure to growth opportunities.
The AUM of energy transition thematic funds rebounded to 2023 levels in the first three quarters of this year, making it again the third-largest thematic category, according to Morningstar’s latest thematic funds report. In Europe, energy transition is the second-largest category behind multi-thematic funds but saw close to $10 billion in outflows in the 12 months to end-September.
EdenTree Investment is set to become the only fund house to apply labels to its entire fund range under the UK Sustainability Disclosure Requirements (SDR) regime, with seven new labels across its equity and bond funds. The £3.2 billion manager will add “Sustainable” to the names of the seven funds, which are picking up a Sustainability Focus label, and is renaming two of its already-labelled funds to add the term “impact”.
Universities Superannuation Scheme (USS) has published policy recommendations to support the UK’s green transition. The pension fund called on the UK government to introduce policies supporting long-duration energy storage, require near-zero emissions steel for public procurement, make investments in EV charging infrastructure and provide subsidies for carbon capture. USS identified the steel, cement, chemicals, shipping and aviation sectors as priorities for the deployment of clean technologies. “There are limits to what asset owners can achieve alone,” the pension fund said.
The £2.3 billion Clwyd Pension Fund is set to adopt a formal exclusion policy for companies on the UN Office for the High Commissioner for Human Rights’ list of firms exposed to certain activities in the Occupied Palestinian Territory after 84 percent of members who responded to a survey backed the move. The fund currently has exposure to companies on the list through a portfolio, which it is exiting as part of its mandated movement of assets into the Wales Pension Partnership, but aims to adopt the exclusions as part of its responsible investment policy review early next year, subject to committee approval.
The Association for Financial Markets in Europe (AFME) has published a position paper on the ongoing trilogue negotiations between EU co-legislators on the sustainability Omnibus. The banking trade group said it supported the removal of sector-specific reporting requirements, limiting due diligence obligations to direct business partners, removing the EU-wide liability regime for due diligence and removing the obligation to put the climate transition plan into effect. AFME said its three overarching priorities were ensuring a “proportionate, workable approach to reporting and due diligence requirements”, avoiding duplication of transition plan requirements, and supporting the fast adoption of the Omnibus.
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