The Pensions and Lifetime Savings Association (PLSA) has updated its Vote Reporting Template to help asset owners, investment managers and platform providers disclose how they enact their shareholder rights.

The Vote Reporting 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.

It is designed to allow asset owners to collect voting information from their investment managers in a standardised way and facilitate an improved dialogue between parties about how their stewardship strategy is being implemented.

The Financial Conduct Authority (FCA) recently confirmed that the PLSA would also be responsible for future oversight of a template for asset managers to communicate with asset owner clients on their voting activity, as outlined by the Vote Reporting Group.

As part of this work, the PLSA has now updated the template to incorporate elements of its existing template into the Vote Reporting Group’s template to create a new version.

In particular, 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 also been included.

The PLSA said that this has resulted in a standardised and comprehensive vote reporting template, which is intended to be more user-friendly and addresses the challenges asset managers currently face relating to the varying nature of vote reporting disclosures.

This is intended to improve vote reporting quality and consistency, reducing reporting costs for asset managers, increasing transparency and comparability for clients, and enhancing engagement and market discipline.

PLSA deputy director of policy, Joe Dabrowski, 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.

"By improving transparency and accountability we aim to lift stewardship standards across the industry to the benefit of savers.”

Adding to this FCA environmental, social and governance (ESG) director, Sacha Sadan, 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. This can help support positive and sustainable real-world change.”

The Pensions Regulator also welcomed the new template, with climate and sustainability lead, Mark Hill, adding: “Savers rely on their trustees to steward their scheme’s investments appropriately. They deserve to know trustees’ voting policies, and whether they are addressing relevant matters such as environmental impact.

“We welcome industry initiatives, such as this by the PLSA, that support trustees in being clear and transparent about the way they steward their members’ money.”

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