Governance-focused shareholder resolutions were the only area of ESG for which support rose during the 2024 proxy season, while backing for environmental and social proposals continued to decline – albeit at a slower rate. Governance resolutions climbed from a low 30% last year to 36%, according to a Morningstar Sustainalytics report, with a growing focus on shareholder rights identified as a key driver behind this trend. Support for environmental and social resolutions fell from 22% last year to 20% – a less severe drop from the 29% received in 2022. Social resolutions were the only type to see an increase in the total number filed during the proxy season, rising to 300 up from 260 last year. Environmental resolutions remained the same at 100, but the proportion filed by those deemed to be ‘anti-ESG’ tripled. The number of ‘well-backed’ key resolutions also suffered a five-year low, plummeting to 37 from a peak of 103 in 2022 – which the report attributes to a contraction in large asset manager votes. BlackRock and Vanguard notably further cut their support for environmental and social proposals, while State Street significantly reduced its backing of such resolutions for the first time. However, asset managers with a pro-ESG voting history did not show the same decline in support. “While shareholder resolutions aimed at social outcomes have historically dominated the ‘E’ and ‘S’ category, they are the only ESG resolutions continuing to grow in 2024, primarily due to anti-ESG proponents,” said Lindsey Stewart, Director of Stewardship Research and Policy at Morningstar Sustainalytics. “Despite environmental resolutions previously leading in support over social proposals in 2022, this gap has narrowed.”
BlackRock and Vanguard cut support for shareholder resolutions again during Proxy season. This time, State Street joined them.
Here is what investors need to know about voting decisions made by the Big Three index fund providers. https://t.co/uLgir0HPsk
— Morningstar, Inc. (@MorningstarInc) September 19, 2024
