ESG-related proxy resolutions decline in the US
There has been a dampening effect on ESG-related proxy resolutions in the US, with shareholder support for climate change and workforce diversity resolutions dropping significantly this spring, according to Reuters.
The new agency quoted shareholder engagement firm Georgeson, which found that tough proposals from activists met with growing political pressure on fund firms’ voting.
“Halfway through the shareholder annual meetings of Russell 3000 companies, average support for voted resolutions on environmental issues was 25% through mid-May, compared with 38% for all the prior proxy season ended 30 June 2022, and 43% for all of the prior year, according to shareholder engagement firm Georgeson. Support for resolutions on social issues fell to 20% this year so far, from 26% in 2022 and 33% in 2021,” said Reuters.
Despite this, Reuters noted that compromises with ESG advocates show executives still care about sustainability matters. “For instance, companies including Ford and eBay agreed to report more workforce details such as recruiting and retention rates in deals that led shareholder activist group As You Sow to withdraw resolutions before they were voted, said its CEO Andrew Behar.”
Reuters added: “Behar added that new resolutions that got low backing stand to gain in coming years, such as a call on Exxon to account for divested assets in emissions reporting, which won 18% support. He also said Republican attacks on ESG likely depressed fund firms’ support for many items.”