Below are key takeaways from ISS’ recently released 2022 Review: United States – Environmental & Social Issues in Proxy Voting. The full report is available to institutional subscribers by logging into ProxyExchange then selecting the Governance Exchange and its Report Center tab and to corporate subscribers by logging into Governance Analytics then selecting the Governance Exchange and the Report Center tab.
- A record number of Environmental & Social (E&S) related shareholder proposals were filed and went to a vote in 2022: Shareholder interest in holding firms accountable on E&S related risks and the change in the SEC’s approach on excludability led to a sharp increase in E&S shareholder proposals on ballot.
- There were a similar number of majority-supported E&S proposals in 2022 as in 2021, but the overall level of support declined. A confluence of factors including the prescriptive nature of many of the E&S proposals that got on ballot in 2022 led to lower average support by shareholders.
- Climate related proposals were the most frequently filed type of shareholder proposal. These also received the most majority support among E&S proposal types, although their average level of support dropped compared to 2021: Some climate proposals called for companies to adopt ambitious GHG reduction targets, including those for Scope 3 emissions and for adopting policies to cease financing new fossil fuel projects.
- Filings of proposals requesting third party racial equity or civil rights audits surged and several received majority support: Investor support for these proposals grew as more companies committed to undertake such audits and some successfully completed and reported their results.
- Interest in corporate political spending transparency remained strong: Particularly, there was a rise in proposals asking for more disclosure on alignment of political spending with publicly stated priorities and values. Support for these increased slightly and one proposal received majority support.
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By: Kathy Belyeu, Michael Ellis, Enver Fitch, Hailey Knowles