Shareholder proposals focusing on ESG matters have gone up for the fourth straight year, according to a 2023 proxy season analysis by governance consultancy Georgeson.
While the analysis found that a record 951 ESG shareholder proposals have been submitted so far in the 2023 proxy season, the year-over-year increase was much smaller than in previous seasons and — most notably — anti-ESG proposals have surged.
Anti-ESG proposals, mostly focusing on the social side of ESG, have so far accounted for about one in 10, which is double their share from the previous season. However, while they’re increasingly being pitched, anti-ESG shareholder efforts haven’t gained traction: None of the 31 that went to a vote this season have passed.
ESG-driven initiatives in the corporate sector continue to expand. In response, controversial policy proposals are gaining traction in statehouses around the country, along with the newly formed Anti-ESG Alliance, a collection of 19 states pledged to protect their constituents from what the group calls a radical movement.Read more
Shareholder angst over ESG reflects a broader political wave in the U.S. that’s seen several states adopt anti-ESG policies.
Still, with the annual general meeting (AGM) season coming to a close at the end of June, the number of ESG proposals winning majority support from shareholders is on track to drop considerably from last year. Through the same time period in 2022, 44 ESG proposals had passed; this year, that figure is just 24.
“Very high volumes of ESG shareholder proposals for four consecutive years suggests that investors’ focus on environmental, social and governance issues represents a lasting trend,” Kilian Moote, managing director at Georgeson, said in a news release. “Diminishing investor support for such proposals seems to reflect a higher volume of proposals that address more prescriptive actions, which are therefore less likely to receive majority support.”
Georgeson’s analysis covers Russell 3000 AGMs where shareholder voting took place between July 1, 2022 and May 12, 2023.