Tag: Proxy Preview 2023

Lots of shareholder proposals on ESG this proxy season—and quite a few anti-ESG proposals too

Notwithstanding legislative and executive action by several states in opposition to the supposed “woke” stances of some businesses on ESG and ESG investing—or perhaps because of it—this proxy season will see a significant number of shareholder proposals related to ESG. (See this PubCo post and this PubCo post.) As described in the 100+-page Proxy Preview 2023 from the Sustainable Investments Institute, As You Sow and Proxy Impact, there have been 542 ESG-related proposals as of mid-February and the number is “on track to match or exceed last year’s unprecedented final total of 627.” Of course, proponents of shareholder proposals don’t often expect to gain a majority vote—even if they did, the proposals are rarely binding.  Rather, the goal is frequently to raise the issue for management and shareholders and hope to secure a substantial enough vote in favor to convince management to take action or, as the WSJ reports, to “create pressure for companies to change [or] to take a position on hot-button issues.” The Preview identified as the two biggest changes for the 2023 proxy season a continued increase in climate change-related proposals and, post-Dobbs, a significant number of proposals related to reproductive health. There has also been an increase in proposals identified as “anti-ESG,” and the Preview expects these proposals to increase, despite “the cool reception they receive.” According to a co-author of the report, “[c]omplex environmental and social challenges are not going away just because they prompt controversy….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.”