June 9 (Reuters) – Analysts say tough proposals from activists come under increasing political pressure for fund companies to vote on proxy statements on topics including climate change and workforce diversity. Shareholder support for the resolution has declined significantly this spring.
Midway through shareholder annual meetings of Russell 3000 companies, average support for resolutions on environmental issues was 25% through mid-May. This compares to 38% for all previous proxy seasons ending June 30, 2022 and 43% for all voting periods ending June 30, 2022. last year, according to shareholder engagement firm Georgeson.
Jorgeson said support for social solutions has fallen to 20% so far this year, down from 26% in 2022 and 33% in 2021.
Jorgeson State strategist Kilian Muto said “we’ve seen a dampening effect” because declines in approval ratings often reflect resolutions calling for measures deemed too burdensome for investors. Stated.
Although he declined to name specific companies, his account is consistent with results such as those of major U.S. banks, which have defeated demands to scale back financing for major fossil fuel projects. At the same time, compromises with ESG advocates demonstrate that management remains concerned about sustainability issues.
For example, companies such as Ford (FN) and eBay (EBAY.O) have been asked to improve employee performance, including hiring and retention rates, in deals that led shareholder activist group As You So to withdraw resolutions before they were even voted on. The company’s CEO, Andrew, said the company had agreed to provide more details. Behar.
Ford declined to comment. eBay did not return messages.
Behar added that new resolutions with low support rates, such as requiring Exxon (XOM.N) to include divested assets in its emissions reporting, could benefit in the coming years, with 18% received support. He also said Republican attacks on ESG are likely to reduce fund companies’ support for many items.
“Their lawyers and compliance people will say, ‘Let’s be a little more careful this year,'” Behar said.
Exxon did not respond to a request for comment.
Benjamin Colton, global head of asset stewardship at State Street Global Advisors, said in an email that while corporate transparency is increasing, what he called “overly prescriptive proposals” said that it is increasing.
“These dynamics have led to an overall decline in investor support for environmental and social shareholder proposals,” Colton said.
Other top asset managers BlackRock (BLK.N) and Vanguard did not comment on the matter.
Both men have previously said they would vote on a case-by-case basis and pointed to the growing number of proposals that could influence their support.
Average support for resolutions submitted by investors opposed to ESG fell from 9% to 6%. For example, the free-market National Center for Public Policy Research asked IBM (IBM.N) to review its ESG performance in China, where it ranked seventh. % support.
IBM declined to comment.
Scott Shepherd, director of the National Center, said the resolution still serves to demonstrate what he called the “partisanship” of top asset managers. He added that many now recognize that risks, such as driving decarbonization, need to be considered before new technologies are ready.
“That’s reflected in the numbers” in this year’s voting results, he said.
Report by Ross Kerber. Additional reporting by Sabrina Valle in Houston. Edited by Lincoln Feast.
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