Some of the world's biggest fund managers voted against a shareholder resolution to force ExxonMobil to assess financial risks posed by climate change.
The resolution at the 27 May annual general meeting (AGM) called for the American oil and gas company to publish an annual assessment of the long-term portfolio impacts of a two-degree scenario.
The Asset Owners Disclosure Project (AODP) has revealed a number of the world's largest asset managers, including BlackRock and Vanguard, voted against the resolution.
This is despite these managers having signed up to the United Nations' (UN) Principles for Responsible Investment (PRI), which involve a commitment to seek appropriate disclosure on environmental, social and governance (ESG) issues.
The resolution was rejected after just 38.1% of shareholders voted in favour.
AODP chief executive officer Julian Poulter said the managers were risking their investments by voting against the resolution.
He said: "Asset managers and asset owners who helped Exxon defeat this modest climate resolution are not only risking their money, they are betraying the millions of ordinary people whose pensions are invested in Exxon stock. Our analysis reveals disturbing hypocrisy, with many investors ignoring responsible investment commitments they have made"
Among those voting against the resolution was the world's largest fund manager, BlackRock, which holds around $4.7trn assets under management (AuM), and Vanguard Asset Management, which has $3.1trn AuM. They jointly own 11% of ExxonMobil shares.
JP Morgan, Capital Group and Franklin Templeton also voted against the resolution despite being PRI signatories.
In contrast some of the biggest pension schemes around the globe voted in favour of the resolution, including California State Teacher's Retirement System and New York State Teachers' Retirement System.
The AODP said the asset managers' votes were critical to defeating the motion.
Vanguard, which holds 6.63% of the company's shares, said it believed it is not in breach of its PRI commitments.
A spokesperson said: ""As a signatory of the UN's PRI, Vanguard is firmly committed to the management of ESG issues as an element of prudent investment and responsible portfolio ownership practices.
"We believe that these actions are consistent with our fiduciary responsibility to manage our funds in the best long-term interests of our investors. We remain confident that our voting and engagement activities are wholly consistent with the commitment we have made to the PRI."
A spokesperson for BlackRock, which owns 4.93% of shares in ExxonMobil, said: "We prefer to engage with companies directly on complex issues such as adaptation to a low carbon economy. We have engaged extensively on a range of issues related to the themes of these shareholder proposals. Where a company is unresponsive, we hold board members accountable."
The firm added it engages with around 1,500 companies a year on range of ESG issues.
On the other hand, State Street Global Advisors and Goldman Sachs, which own a combined 5.06% of shares, voted in favour of the resolution.
The research also revealed only 35 of 1,069 pension funds responded to members asking how they would vote in the resolution.
Almost all (99%) of US funds failed to reply to members, while 85%, 83% and 82% failed to respond in Europe, Canada and Asia Pacific respectively.
Of these, 136 were signatories to the PRI, which requires investors to report on their activities and progress towards implementing the principles.
AODP said the most common reason for pension funds not disclosing voting records was because voting was delegated to their asset managers, with 29% stating this was the case. Another 14% said they would disclose how they voted "well after the AGM", while 11% refused to say.
Only 82 pension funds, worth around $10trn, announced their support for the resolution prior to the meeting, including the Environment Agency Pension Fund and BT Pension Scheme.
AODP's Poulter criticised fund managers which used a default voting method, where they vote in line with the company's board, and called for regulatory intervention.
"Asset owners write contracts with fund managers, but these included short-term incentives which drive short-termism through the whole industry," he said. "There is also a sense in the fund management community of not wanting to rock the board, so there is a huge disconnect from members.
"The problem is a structural one. The reality is there is a default mechanism that exists inside the industry. The chances are the fund managers will have a default voting policy to vote with however the company wants. That is crazy. They are basically allowing any company to run themselves in the way they see fit without any accountability whatsoever.
"The regulators need to take a stand here. There should be no default voting."
Nine resolutions relating to ESG issues were put forward in the ExxonMobil AGM, but all were rejected. These also included adding a climate expert to the board.
In a recent PP survey, 53% of the pensions industry said they do not consider climate change to be a financially material risk, with one even describing it as "overblown nonsense".
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