NEW YORK, June 24, 2024 – The number of proposals made by shareholders that have focused on environmental, social and governance (ESG) or anti-ESG matters so far this year has already broken records, according to Georgeson’s review of the early 2024 annual general meeting (AGM) season.
Shareholder Proposal Submissions
|
2022 |
2023 |
20241 |
|
|
Environmental |
176 |
180 |
170 |
|
Social |
363 |
354 |
338 |
|
Governance |
345 |
319 |
378 |
|
Anti-ESG |
57 |
94 |
112 |
| Total | 941 | 947 | 998 |
In its 2024 Early Proxy Season Review, Georgeson analyzed the AGMs of Russell 3000 companies and found a combined 998 ESG and anti-ESG shareholder proposal submissions during the season to date (July 1, 2023 to May 17, 2024): surpassing the 941 and 947 put forward during the 2022 and 2023 AGM seasons respectively.
The report shows that anti-ESG submissions have increased by 19% (112) since last year and have accounted for 11% of all ESG-related proposals so far this year. Overall, anti-ESG submissions are up by more than 90% since 2022.
Anti-ESG proposals focused on the environment have more than doubled from six in 2023 to 15 so far this year. Despite the significant increases in such proposals, support has declined each year since 2022 and remains in the low single digits.
Shareholder support for environmental and social (E&S) proposals has seen an overall decline in support so far in 2024 with only one environmental proposal passing compared to four during 2023. No social shareholder proposals have passed so far during the 2024 AGM season.
The report also shows that shareholder interest in governance matters has surged, with 378 shareholder proposal submissions so far in 2024: an 18% increase over last year’s 319.
Early indications suggest that shareholder support for governance proposals has also significantly risen since last year: 36 such proposals have passed so far this season compared to 24 that passed during the 2023 AGM season.
Shareholder support for director elections as well as Say-on-Pay remains strong and, in fact, increased slightly for the third season running.
Georgeson identified 76 different subtopics across ESG and anti-ESG proposals during the AGM year to date.
New and notable subtypes this season included artificial intelligence, director resignation, biodiversity, and worker health and safety.
- Biodiversity: 12 such proposals in 2024 compared with none in 2023
- AI: 15 shareholder proposals in 2024 and none in 2023
- Health and safety: 16 submissions across several different industries in 2024 compared with a few proposals that mentioned it last year
- Director resignation: The United Brotherhood of Carpenters and Joiners of America (UBC)
- led 40 such proposals as part of its focus on board accountability this year
Additional early season findings
- As of May 17, activists had leveraged the Universal Proxy Card (UPC) rule to gain 103 board seats, compared to 110 during the 2023 AGM season.
- Social proposals comprise the majority of anti-ESG proposals at 71% (80 out of 112) in 2024 so far: a similar proportion to previous seasons.
- So far greenhouse gas reduction proposals in 2024 that focused on Scope 1 and 2 emissions have received higher support (35%) than those that included Scope 3 (23%) and those that included the emissions report from a company’s supply chain.
- Of the 84 compensation-related proposals submitted so far in the 2024 season, 37 concerned executive severance payment policies and approaches. Average support for the 24 severance proposals voted upon to date is 12%: a significant decline from last year’s average (48%).
- Just 10% of proponents (or their affiliated groups) filed the majority (61%) of shareholder proposals this year.
- The SEC has granted more ‘no-action relief’ this year, contributing to a higher percentage of omitted proposals.
- 17 of the reliefs granted were related to novel director resignation policy proposals. As of May 17, there have been fewer proposals withdrawn this year (14%) than last year (23%).
Georgeson has urged companies to take the time to understand their shareholder base and their investor’s ESG expectations, especially on climate change and sustainability, diversity and board structure as well as employee and executive compensation.
Georgeson has collected and published data on corporate governance trends since 1987: the same year institutional investors first sponsored shareholder proposals.
Georgeson’s 2024 Early Season Review is available here.
Notes
1 2024 data covers Russell 3000 AGMs where shareholder voting took place between 7/1/2023 and 5/17/2024
2 Full year 2023 AGM season data covers 7/1/22 and 6/30/23 and full year 2022 data covers 7/1/21 and 6/30/22
3 Russell 3000 refers to the 3000 largest companies in the US.
4 For high-resolution images of spokespeople, visit http://cpu.vg/spokespeople.