The US proxy voting season is about to click into gear, with climate issues again top of the agenda. There’s a growing focus on social issues, DEI and workers’ rights across motions tabled, and it looks very likely the record 627 shareholder resolutions considered last year will be exceeded.
Research carried out by shareholder advocacy group As You Sow in its Proxy Preview shows that by mid-February some 542 shareholder resolutions on ESG issues had been tabled. There are more climate change proposals than ever, and what the report calls “a significant expansion” in resolutions about reproductive health. That comes in the wake of last June’s Supreme Court decision to overturn Roe vs Wade.
There are also proposals pressing for better labor standards and the right to unionize, and a good number addressing corporate political influence. The report also notes that: “Early indications are that anti-ESG resolutions, which expanded last year, will increase still further despite the cool reception they receive.” The organization’s research revealed average support of just 3.5% for anti-ESG motions last year.
The subject matter breakdown of the 542 resolutions received by mid-February was;
- Climate change 23%
- Political influence 17%
- Human rights 15%
- Decent work 8%
- Anti-ESG 8%
- Health 8%
- Diversity at work 7%
- Other environmental 7%
- Board structures 3%
- Sustainable governance 3%
- Other 1%
By the end of January, there had been 30% fewer requests from companies to omit proposals. This follows the SEC decision to rescind guidance issued in Staff Legal Bulletin 14L, narrowing the basis for exclusion.
Examination of the 122 climate-linked proposals found 72 are on emissions – with Exxon Mobil, Chevron, BP and Shell all targeted – and 452 ask for more understanding of strategy and risk assessment and eight focus on deforestation. Climate issues are appearing on ballots across sectors at big names, including Amazon, Goldman Sachs, Raytheon and CarMax.
“Hyper-partisanship in the political arena means companies face ever-greater scrutiny about the actions of political players they fund.”
As You Sow Proxy Preview
There’s a strong focus on political influence, with around 30 resolutions on lobbying, 28 on elections and 35 that highlight clashes between corporate policies and investor views. The report observes: “The established approach to political money controversy — adopting a policy and providing oversight and disclosure — is clearly not sufficient to the moment for most; hyper-partisanship in the political arena means companies face ever-greater scrutiny about the actions of political players they fund.”
Seven of the proposals examined ask how companies are handling the risks created after the decision to overturn Roe vs Wade, with another seven asking how law enforcement queries about private health information will be handled. Coca-Cola, McDonalds and Pepsico are among the employers being asked these questions. There are three proposals asking hospital companies about their policies on access to abortion.
Anti-ESG
There are at least 40 anti-ESG proposals, a significant increase. As You Sow says many come from partisan right-wing groups. The low level of support gained for such motions last year suggests that while anti-ESG sentiment is broadcast loudly, it is gaining little traction in corporate circles.
SEC rule changes requiring the disclosure of pay-versus-performance data mean there will be increased attention paid to so-called ‘say-on-pay’ proposals. There’s also a sharper focus on human capital issues such as labor relations and the use of concealment clauses. The Starbucks AGM could be a particularly interesting indication of how institutional shareholders consider these issues.