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Analysis: Fidelity records first "green" proxy votes
BOSTON (Reuters) - Four mutual funds at Fidelity Investments recently backed an environmentalist proxy proposal for the first time on record, showing how even the historically aloof fund giant has begun to join other investment firms lending more support to green measures.
To be sure, the votes cast by Fidelity funds at MGM Mirage were dwarfed by the scores of occasions when Fidelity's funds abstained on shareholder environmental proposals, according to a count sponsored by Ceres, a coalition of environmentally minded investors.
Still, advocacy groups who pore over proxy records said the votes could mark the start of a new environmental embrace at Fidelity, one of the most influential of U.S. mutual fund firms.
"This is a tiny symbolic gesture on their part, but one in the right direction," said Rob Berridge, senior manager at Ceres. "It's definitely a sign of progress."
A Fidelity spokesman said the company would not discuss individual proxy votes.
Few other fund firms give much detail either, although collectively they control more than a trillion dollars' worth of U.S. workers' retirement savings. That leaves technical reviews by groups like Ceres the best window into the funds' voting patterns -- and their oversight of Corporate America.
Fidelity's ballots were part of a broader pattern that Ceres found in a review of how large fund firms voted on shareholder climate-change resolutions this year.
In keeping with past trends, Ceres found several fund firms became more likely to support shareholder proposals that called on companies to take steps such as tracking pollution they emit, or improving energy efficiency.
Change comes slowly in the tradition-heavy industry of fund management. Ceres found that like Fidelity, Pioneer Investments shifted to favor environmental resolutions for the first time this year, and that companies like T Rowe Price Group increased their support for such proposals. But a few managers including BlackRock Inc reduced support for climate-change resolutions this year, Ceres found.
FUND FIRMS START TO BACK ENVIRONMENTALISTS
BlackRock did not make executives available to comment. Fidelity is especially guarded about its votes, which in the case of equities are determined by a fund board led by Fidelity Chairman Edward Johnson III. He turned 80 in June and has not granted interviews in years.
Still, Fidelity's votes have shifted in ways that mirror how American businesses are gradually embracing "green" stances. For several years, until 2006, Fidelity funds had voted "against" all climate-change resolutions, according to the count by Ceres.
But in 2007, of the 92 times Fidelity funds voted on the matters, 82 were to "abstain" and just ten were "against." Last year its funds abstained on all such resolutions tracked by Ceres, 155 times in all.
As environmental proposals go, the one Fidelity funds backed at MGM was hardly radical. Proposed by New York City Comptroller John Liu, it urged management at MGM Mirage, now MGM Resorts International, to craft a "sustainability report" tracking the company on areas like greenhouse gas emissions.
MGM's board had opposed the proposal, noting a previous one backed by Liu had gotten just 12 percent of votes cast at its 2009 meeting and that the company already collects such data.
At this year's annual meeting in June the measure again was defeated, but by a narrower margin, with 203 million votes against it, 52 million abstaining, and 55 million in favor.
Still, the executive at Liu's office who oversees corporate-governance matters, Michael Garland, said the votes suggested Fidelity's attitude is shifting. "These votes are significant. They suggest Fidelity now recognizes climate change is a business issue," Garland said.
Liu's office acts as the investment adviser to five New York City pension funds that together have roughly $100 billion in assets. Liu also has a representative on Ceres' board.
FIDELITY VOTES STILL PUZZLE
Ceres' Berridge said it was confusing that of all the climate-change measures on which Fidelity voted, it sided with Liu on the one at MGM. Seven Fidelity funds voted "abstain" on a similar measure that Liu's office filed at another casino operator, Las Vegas Sands Corp, according to the Ceres count, conducted by fundvotes.com.
Ceres found Pioneer was another fund firm that backed some climate-change resolutions for the first time this year.
Pioneer Executive Vice-President John Carey said no formal policy shift had been made. But events like the massive BP Plc oil spill in the Gulf of Mexico this year underscored the risks companies face if the do not pay close attention to environmental issues, he said.
In that vein, Pioneer funds voted "for" a resolution at Exxon Mobil, urging the energy giant to report on the environmental and financial risks that an oil sands operation in Canada could pose.
"In this time of oil spills, one has to be cognizant of the risks to a company if they don't get their processes right," Carey said.
(Reporting by Ross Kerber, editing by Ros Krasny and Matthew Lewis)
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