The Pensions and Lifetime Savings Association (PLSA) has updated its vote reporting template to improve stewardship and raise the current standard of voting disclosures.
The PLSA announced it had taken on the vote reporting template of the Vote Reporting Group (VRG) – a group convened by the Financial Conduct Authority (FCA) – merging it with elements of its existing template to create a new updated resource.
Joe Dabrowski, deputy director of policy at the PLSA, said: “As stewards of more than £2.5trn, pension schemes wield significant power to change the behaviour of companies for the better, improving practices and increasing shareholder returns.
“The new and improved vote reporting template we have launched today will allow investment managers to report on their voting activity more easily and at a lower cost, and further standardisation means asset owners will have better quality information to have a dialogue with their asset managers about how their stewardship strategy is being expressed.”
He added that by improving transparency and accountability, the PLSA aims to “lift stewardship standards across the industry to the benefit of savers”.
The VRG was established in 2022 in response to the Taskforce on Pension Scheme Voting Implementation’s (TSVI) report in 2021 and, along with the FCA, was subsequently tasked with defining the detail and parameters of a more comprehensive vote disclosure regime for asset managers operating in the UK.
The updates include incorporating standard vote category fields and a narrative rationale field alongside relevant elements of the existing PLSA template. Notably, fields to allow managers to outline the rationale for voting decisions on issues that are determined to be significant votes have been included, according to the PLSA.
The announcement from the PLSA comes ahead of this year’s annual general meeting (AGM) season, with some industry stakeholders expressing concerns for the future of stewardship and shareholder engagement.
The template was first produced in 2020 in response to new regulations requiring pension fund trustees to demonstrate how they are acting as effective stewards of their assets, including how they are using their voting rights to support or sanction corporate behaviour among their investee companies.
Caroline Escott and Shipra Gupta, co-chairs of the VRG, said: “Shareholder voting is fundamental to effective stewardship that achieves sustainable value creation. Timeliness, consistency, and decision-useful information on voting actions undertaken on behalf of everyday UK savers has been a longstanding discussion and debate between asset owners and asset managers.”
They continued: “During our tenure as co-chairs, we have continued Deborah Gilshan’s work to do just that, helping us produce a template that meaningfully raises the current standard of voting disclosures in a way that can be implemented, scaled and used by investors of all shapes and sizes.”
They added that asset managers, in particular, could benefit from a consistent and standardised market-wide approach, enabling them to more efficiently meet the requirements of their clients.
Sacha Sadan, director of ESG at the FCA, said: “This standardised and comprehensive template acts as another tool that can provide meaningful insight on how asset managers vote, allowing their clients to compare and align their voting intentions.”
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