Below are key takeaways from ISS’ recently released 2023 Proxy Season Review – United States –Environmental & Social Issues. 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.
- Number of environmental & social (E&S) shareholder proposals filed continued to grow. As of Aug. 30, 2023, 625 E&S proposals were submitted and of these 356 were voted on ballots.
- Average support for E&S proposals continued to decline. Support for environmental and social proposals was down across the board, likely driven by change in the nature of proposals, politicization of “ESG,” energy supply uncertainties resulting from the war in Ukraine and other geo-political factors, an increase in the number of “anti-ESG” proposals, and expectations about regulatory changes.
- Far fewer E&S proposals received majority support in 2023. The number of majority-supported E&S proposals declined to eight through August 2023, down from 37 in all of 2022 and a high of 39 in 2021.
- Climate change remained the most common E&S-related shareholder proposal topic. Other frequent topics included diversity, equity, and inclusion (DEI), political spending, human rights, and worker health/safety.
- A record high number of “anti-ESG” shareholder proposals were filed in 2023. With 62 filed and 38 on ballot up to Aug. 30, 2023, the volume of these proposals, which question the values of traditional ESG factors, has increased significantly two years in a row.
- A “just transition” or a plan to minimize impacts of a climate transition on workers and communities; risks of doing business in China; and freedom of association were the top emerging E&S issues this proxy season. Other emerging issues included data privacy risks associated with anti-abortion legislation; ensuring financial assumptions match climate transition goals; country-by-country tax transparency; and how technology tools (algorithms and AI) may impact the workplace and society.
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