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Shareholder ESG support down but not out, researchers say

As asset managers shied away from backing tougher investor requests.
Image: Shutterstock

Average support for shareholder resolutions on environmental, social and governance (ESG) topics at US companies dipped to 26.6% this year from 32% in 2021 as asset managers shied away from backing tougher investor requests, new data showed.

Activists still won a majority of support on 34 ESG resolutions so far this year, the same level as a year earlier, according to the data through July 1 provided to Reuters by activist group As You Sow and researchers Proxy Impact and the Sustainable Investments Institute.

Heidi Welsh, executive director of the latter, said strong results for ESG resolutions in 2021 sometimes led activists to propose ideas beyond what many investors were willing to support.

For instance less than 15% of investors backed calls for several banks to stop new lending for fossil fuel projects in April.

“Last year was such a big year the proponents were emboldened,” Welsh said.

Still ESG activists claimed wins including at gunmaker Sturm Ruger & Co where 69% of votes cast backed a call for a human rights report in June.

A Ruger representative did not respond to requests for comment.

Shareholder ESG resolutions hold a central place at many corporate annual meetings as investors take account of issues like workforce diversity and rising global temperatures.

Top asset manager BlackRock Inc said in May it would likely back fewer climate resolutions as many were too prescriptive.

Also some Republican politicians have targeted financial companies for their stances on issues like firearms lending.

Nonetheless, a record 266 shareholder resolutions on ESG topics were withdrawn this year, up from 223 last year, Welsh said, often under deals companies struck with activists.

Single-digit support for a larger number of conservative shareholder resolutions this year also helped lower the overall support figure, Welsh said.

“The obituary for ESG is definitely premature,” she said.

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