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"Investors... appear to be doubling down on their bets that strong boards and best-in-class ESG practices will equate with resilient business strategies." said ISS Special Counsel Pat McGurn.

May 14, 2020

A Tale of Two Seasons: Trends in Support for 2020 Shareholder Proposals

Overall, voting on shareholder proposals at U.S. companies in 2020 is roughly comparable to that evidenced last year, save for a few notable differences. In an analysis by ISS’ Governance Research & Voting (GRV) arm of Russell 3,000 company vote results available for meetings through May 10, 2020, and compared with the same period in 2019, GRV finds that while fewer resolutions were voted thus far in 2020, a larger share are receiving majority support and more with such support levels are focused on environmental and social matters. 

Fig. 1: Portion of Majority Supported Shareholder Proposals, 2019

Source: ISS Governance Research & Voting

Fig. 2: Portion of Majority Supported Shareholder Proposals, 2020

Source: ISS Governance Research & Voting

Albeit a small sample size, just three of 19 majority supported proposals were focused on social issues at meeting in just over the first five months of 2019 and none at all on environmental matters. Majority supported topics in 2019 included opioids, human rights reporting, and employment diversity disclosures.  By contrast, those topics are again prevalent this year alongside proposals on climate change and political contribution disclosures tallying seven of the 23 majority supported resolutions thus far in 2020.

“When the COVID-19 pandemic sent global markets into a tailspin, some pundits were quick to question whether investors would take a few steps back from their growing commitment to ESG,” said ISS Special Counsel Pat McGurn. “Based on the high rate of negotiated withdrawals of environmental and social proposals heading into the season and the record-setting pace of majority votes on climate risk and sustainability-related resolutions so far, it appears that investors aren’t folding their hands. Instead, they appear to be doubling down on their bets that strong boards and best-in-class ESG practices will equate with resilient business strategies.”

Table 1: Environmental and Social Shareholder Proposals with Majority Support Through May 10, 2019 and 2020

CompanyMeeting DateProposal% Support*
Phillips 665/6/2020Report on Risks of Gulf Coast Petrochemical Investments54.7
Centene Corporation4/28/2020Report on Political Contributions Disclosure51.4
Genuine Parts Company4/27/2020Report on Equal Employment Opportunity 79.1
Fastenal Company4/25/2020Prepare Employment Diversity Report61.1
J.B. Hunt Transport Services, Inc.4/23/2020Report on Political Contributions Disclosure53.2
J.B. Hunt Transport Services, Inc.4/23/2020Report on Climate Change Initiatives54.5
Johnson & Johnson4/23/2020Report on Governance Measures Implemented Related to Opioids60.9
The GEO Group, Inc.5/7/2019Report on Human Rights Policy Implementation87.9
Newell Brands, Inc.5/7/2019Prepare Employment Diversity Report56.6
Walgreens Boots Alliance1/25/2019Report on Governance Measures Implemented Related to Opioids60.5
*Based on votes cast “for” and “against.”
Source: ISS Governance Research & Voting, Russell 3,ooo

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By ISS Governance Research & Voting Team

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