UK – Morley Fund Management, the investment management arm of insurer CGNU, has introduced a requirement in its corporate voting policy for FTSE 100 companies to produce environmental reports on their business activities or risk being voted against at their AGMs.

The company believes it may be the first positive environmental engagement of its type in the UK asset management industry.

Morley’s size in the UK market will add weight to its corporate governance calls.
The manager currently runs in excess of £100bn (e161bn) in assets, of which £42bn is invested in UK equities – the equivalent of two and a half per cent of the UK stockmarket.

Anita Skipper, head of corporate governance at Morley, comments: “Identification of environmental risks and opportunities is becoming increasingly important for institutional investors. We believe that management ought to be actively considering steps to report publicly on their key environmental issues. The new addition to our corporate governance policy encourages companies to move in that direction. We believe this policy is unique in the UK fund management industry.”

Morley’s corporate governance policy states that where FTSE 100 companies do not publish a report that demonstrates what it calls ‘robust processes’ to minimise environmental damage and if management do not show any intent to do so, the fund manager will vote against the resolution to adopt the report and accounts.

For FTSE 250 companies in high-risk sectors, Morley says it expects similar reports to be produced and will abstain on the resolution to adopt the report and accounts should this not be the case.

UK fund manager Henderson Investors also recently adopted a similar corporate governance policy for FTSE 100 companies, saying it would actively engage with directors on environmental, human rights and employee and community relations policies.