The fall in support for ESG-related shareholder resolutions may show increasing demand for high-quality proposals that are more likely to drive impact, according to the Principles for Responsible Investment (PRI). In a recently published analysis of trends and challenges in sustainability-related shareholder resolutions, the PRI found that majority-supported sustainability-related shareholder resolutions fell from 79 in 2022 to 29 in 2024, with average shareholder support for sustainability-related shareholder resolutions for environmental and social proposals sliding from 28.2% in 2022 to 15% in 2024 and from 33% to 25.4% for governance. “If anything, the fall in support for resolution shows that there’s an increasing scrutiny and demand for high quality and impactful resolutions,” René Van Merrienboer, Director of Sustainable Systems at the PRI, told ESG Investor. He added: “Companies and filers negotiate on the resolutions, which leads to resolutions being withdrawn if there’s a satisfactory outcome of that negotiation. This very often means that [those] that stay on the ballot are the more challenging resolutions,” In its report, the PRI stated that securing a commitment to an agreed course of action from the company through engagement before a vote on a shareholder resolution can be “just as successful as filing a resolution” in terms of investor stewardship. However, the research noted that due to the non-binding nature of resolutions, there is no guarantee of board action even after a successful vote. Van Merrienboer said: “Our message to investors is that your job doesn’t stop when you file the resolution and it’s put to a vote, but that there is a need for continued engagement on the resolution after filing to ensure that corporate boards implement it.”
