Voting for Sustainability
is our annual ranking of major investors based upon their disclosed proxy voting records. Our 2024 global ranking covers 140 asset managers and pension funds.
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2024 Report: Voting for Sustainability
We developed a first-of-its-kind methodology to benchmark investors' sustainability orientation on the basis of their proxy voting records. Download the global Voting for Sustainability report to learn more about the unique methodology we applied to benchmark 140 asset managers' and pension funds' voting records.
FAQs
What is the "Voting for Sustainability" ranking?
The "Voting for Sustainability" ranking evaluates the sustainability orientation of major investors based on their proxy voting records. Using a rigorous methodology, the ranking highlights how investors use their votes to support sustainability-focused strategies at the companies in which they invest.
What is the source of the voting data used to rank investors?
Asset managers and most pension funds were ranked on the basis of their publicly disclosed voting records in 2024. A number of pension funds shared their voting records directly to enable benchmarking of data they do not currently disclose publicly. As asset owners' ranks are only disclosed to the respective asset owner, and they aren't in competition with one another, this setup was deemed justifiable.
What is the purpose of the "Voting for Sustainability" ranking?
The ranking aims to promote greater transparency, providing a new metric for voting to gauge alignment between investors' actions with the long-term value creation objectives. It provides insights that empowers investors and the public to support greater sustainability-alignment.
How can this ranking benefit investors?
The ranking benchmarks investors' alignment with sustainability and governance principles against over 140 global peers. It helps investors better understand their own profile vis-a-vis and select partners who share their commitment to sustainability.
Who developed the "Voting for Sustainability" ranking?
The ranking was originally developed through a collaboration between the Investor Impact Initiative, rezonanz, and the ZHAW Center for Global Competitiveness, with voting recommendations from Ethos defining the sustainable position against which managers were benchmarked. rezonanz has further developed the methodology for the global ranking with the vision to make this an annual ranking.
How is the "Voting for Sustainability" ranking different from traditional ESG rating approaches?
Unlike traditional ESG ratings that often focus on screening investments based on positive or negative criteria, this ranking evaluates investors directly by analyzing their actual proxy voting choices. It emphasizes the importance of investment stewardship and active shareholder engagement in driving corporate practices towards greater sustainability.
What methodology is behind the "Voting for Sustainability" ranking?
The ranking employs quantitative methods from political science, using advanced statistical models called Ideal Point Estimation techniques including Bayesian Item Response Theory (IRT) to analyze voting behaviors. For more information, visit our dedicated page detailing our first-of-its-kind custom benchmarking approach: https://www.rezonanz.io/benchmarking
What data points were used to rank investors?
The ranking uses publicly disclosed proxy voting records from Q1 & Q2 2024. It standardizes this data to create a uniform dataset for comparison and assesses those records against a benchmark of 428 sustainability-relevant proposals from both management and shareholders.
What makes a proposal "sustainability-relevant" according to the ranking?
A sustainability-relevant proposal can be a shareholder proposal closely related to sustainability topics, management proposals such as say-on-climate or board elections at companies lagging in sustainability performance.
To define the benchmark, we compiled a longlist of proposals flagged by:
-Ethos
-ClimateAction 100+
-ShareAction
-PIRC
-ICCR (Interfaith Center on Corporate Responsibility)
-ACCR (Australasian Center for Corporate Responsibility)
-As You Sow
-Majority Action
-The Shareholder Commons
Only those proposals flagged by at least two organizations and with agreement across all the organizations flagging it were included in the final benchmark, which reduced the set of investor votes assessed to 428 votes.
Can I review the list of sustainability-related proposals used as the benchmark?
Yes, the list can be provided upon request.
Your benchmark covers only a subset of the votable/investable universe. How does this affect your assessment? Doesn’t a sub-selection bias the results?
The benchmark includes hundreds of proposals carefully chosen to reflect key sustainability issues. Investors typically follow their own proxy voting guidelines, which are designed to be applied consistently across all proposals. If we assume that asset managers vote according to these guidelines (an assumption that can be tested in further research), then their underlying stance on sustainability should be evident in each vote cast. As a result, focusing on a subset of pivotal proposals should not introduce significant bias into the overall assessment.
How are missing votes, abstentions, and “Did Not Vote” cases treated?
For this iteration of the ranking, missing votes, abstentions, and "Did Not Vote" cases are all excluded from the analysis.
How do you handle situations where an investor votes differently across their various fund holdings?
Split votes are rare in our dataset and have been excluded from this analysis. Most investors still disclose their voting records at the total/"house" level rather than at the individual fund level, therefore staying at house level maintains comparability across investors. Should split voting become more common in the future, we plan to enhance our analysis by including votes at the fund family or individual fund level for greater granularity. However, until broader disclosure at the fund level is achieved, we have chosen to maintain the analysis at the house level.
How do you ensure the world’s largest asset managers and smaller managers are treated the same?
As stated in response to question 11, missing votes are not penalized, so smaller asset managers invested in (or voting at) a smaller subset of companies will only be assessed on the votes they cast.
What is ideal point estimation, and how is it used in this ranking?
Ideal point estimation is a statistical method used to uncover hidden preferences based on observable choices. Originally developed to map the political leanings of legislators based on their voting patterns, we’ve adapted this technique to evaluate investors' positioning on sustainability. By analyzing their proxy voting records, we can place asset managers on a spectrum that reflects their alignment with sustainability principles, providing a data-driven measure of their commitment to responsible investing as expressed by their actual voting choices.
Why do you use advanced statistical models instead of simply calculating the percentage of votes where an asset manager votes as the benchmark?
Our methodology ranks investors relative to each other based on their voting patterns on benchmark proposals. While a simple percentage of agreement with the benchmark provides a basic level of overlap, it treats all votes as equally important. Using advanced statistical models, like ideal point estimation, developed specifically to assess voting data, allow us to capture deeper insights by analyzing the nuances of each vote. This approach weights votes differently and reveals the underlying preferences of each investor, offering a more comprehensive view of their sustainability orientation.
Do you have a more in-depth methodology explanation?
Yes, an explanation going deeper into the statistical methodology applied is available upon request.
amplifying investors' voices to enable better decisions