Investors are expressing their growing interest in addressing ESG issues with the filing of a record number of shareholder resolutions to be considered this proxy season, according to As You Sow, the Sustainable Investment Institute and Proxy Impact in the Proxy Preview 2023 report released Wednesday.
Investors filed 542 shareholder resolutions concerning environmental, social and governance issues in 2022 that they want public companies to take into consideration. Climate change, corporate political influence, racial justice, and reproductive and worker rights were the leading concerns, the organizations said. Many of these resolutions will be voted on at spring and summer corporate annual general meetings.
“Politicians are wrangling over the definitions and merits of ESG investing. But proxy season continues to offer ideas for how companies can manage growing systemic risks from accelerating climate change disruption and political dysfunction,” the organizations said. Investors have shown long-term support for companies adopting for net-zero greenhouse gas goals and reporting on the management of climate risks and opportunities. In addition, fair pay and treatment at work, paid sick leave, and the right to organize are also featured in the shareholder proposals.
“Shareholder resolutions have always been at the forefront of these efforts — first by educating companies and investors about climate risk and solutions, and more recently by calling for quantitative metrics on greenhouse gas emissions reduction targets, alignment with science-based targets, and incorporating climate-risk mitigation into executive compensation packages and company-wide business strategies,” Michael Passoff, CEO of Proxy Impact and co-author of Proxy Preview 2023, said in a statement.
As You Sow said victories have been accomplished recently by Visa agreeing to disclose more on gender and racial pay disparities and Apple agreeing to report on union rights.
Other resolutions ask companies to help protect reproductive rights. The not-for-profit Rhia Ventures is coordinating an investor response to the state abortion bans that have been passed or considered in the wake of the June U.S. Supreme Court decision that struck down Roe v. Wade. “An early victory for proponents came when HCA Healthcare, responding to the confusing and evolving legal landscape for abortion, clarified publicly that its member hospitals are prepared to provide abortions in medical emergencies,” the organizations said.
Still other resolutions ask for information about how and why companies spend money to try to influence politics, whether the companies comply with a new corporate tax accountability standards, and how they address human rights risks at home and abroad.
“Complex environmental and social challenges are not going away just because they prompt controversy,” Heidi Welsh, executive director of the Sustainable Investment Institute, said in a statement. “Proxy season will give companies feedback on reform ideas, but there’s no indication attacks on ESG investing are going to dampen investor appetite for facts and disclosure, which make the capital markets work better.”
Andrew Behar, CEO of As You Sow and the publisher of the report, added in a statement, “The extractive economy is winding down; a new economy based on justice and sustainability is emerging. Leading corporations understand that now we are finding solutions, not hiding from big systemic risks like climate change and racial injustice. Companies will outperform if they embrace innovative ideas in these shareholder resolutions.”