BERKELEY, CA—MARCH 22, 2023—Today, As You Sow, Sustainable Investments Institute (Si2), and Proxy Impact, released Proxy Preview 2023, which takes a comprehensive look at another record-breaking year, with more than 536 shareholder resolutions filed on environmental, social, and sustainable governance (ESG) issues. Hundreds of these resolutions are heading for votes at spring and summer corporate annual general meetings.
Politicians are wrangling over the definitions and merits of ESG investing. But proxy season continues to offer ideas for how companies can manage growing systemic risks from accelerating climate change disruption and political dysfunction.
A mandatory climate disclosure rule is coming, reflecting long-term support from investors, who this year will consider even more proposals asking for net-zero greenhouse gas goals and reporting on the management of climate risks and opportunities. Proponents have new ideas for accurate corporate carbon accounting and ensuring a “just transition” for workers affected by economic shifts.
Fair pay and treatment at work, paid sick leave, and the right to organize are also featured in shareholder proposals. Early success for the 2023 season includes companies agreeing to disclose more on gender and racial pay disparities (Visa) and report on union rights (Apple).
More proposals ask companies to protect Americans’ digital privacy to safeguard reproductive and maternal health care rights. Rhia Ventures is coordinating an investor response to proliferating state abortion bans in the wake of the June U.S. Supreme Court decision that struck down Roe v. Wade. An early victory for proponents came when HCA Healthcare, responding to the confusing and evolving legal landscape for abortion, clarified publicly that its member hospitals are prepared to provide abortions in medical emergencies.
A host of other issues include questions about how and why companies spend to influence politics, whether they comply with a new corporate tax accountability standard, and how they address human rights risks at home and abroad.
Company efforts to block shareholder proposals at the U.S. Securities and Exchange Commission (SEC) are down about 30%, responding to a late 2021 interpretive shift at the SEC.
“Complex environmental and social challenges are not going away just because they prompt controversy,” said Heidi Welsh, executive director of Si2 and co-author of Proxy Preview 2023. “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.”
“Shareholders continue to work closely with company executives and boards to address material risk for all stakeholders,” said Andrew Behar, CEO of As You Sow and report publisher. “The extractive economy is winding down; a new economy based on justice and sustainability is emerging. Leading corporations understand that now we are finding solutions, not hiding from big systemic risks like climate change and racial injustice. Companies will outperform if they embrace innovative ideas in these shareholder resolutions.”
“The attacks on ESG appear to be in large part a response to investors’ increasing demands for corporate action on the climate crisis,” said Michael Passoff, CEO of Proxy Impact and co-author of Proxy Preview 2023. “Shareholder resolutions have always been at the forefront of this effort — first by educating companies and investors about climate risk and solutions, and more recently by calling for quantitative metrics on greenhouse gas emissions reduction targets, alignment with science-based targets, and incorporating climate-risk mitigation into executive compensation packages and company-wide business strategies.”
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Proxy Preview 2023 has commentary from more than 30 experts, describing this year’s top ESG issues and the risks, and opportunities facing investors and corporate executives.
As You Sow is the nation’s leading shareholder advocacy nonprofit, with a 30-year track record promoting environmental and social corporate responsibility and advancing values-aligned investing. Its issue areas include climate change, ocean plastics, pesticides, racial justice, workplace diversity, and executive compensation. Click here for As You Sow’s shareholder resolution tracker.
Proxy Impact provides shareholder engagement and proxy voting services that promote sustainable and responsible business practices.
Sustainable Investments Institute (Si2) gathers data and provides impartial analysis for institutional investors to make informed, independent choices on social and environmental shareholder proposals.