Stockholm (NordSIP) – Newly published analysis of shareholder resolutions and proxy voting by the Principles for Responsible Investment (PRI) reveals global investors shifting priorities. One notable trend is the gradually increasing gap between North America and the rest of the world.
The PRI’s Resolution Database aims to keep track of global shareholder resolutions, management proposals, as well as the resulting votes. Analysis of this year’s proxy season shows that the overall number of sustainability-related resolutions decreased by a quarter versus 2024.
US proxy voting in a state of flux
The sharpest decline was in the United States (US), where only 470 shareholder proposals were filed compared with 709 in 2024. This has been largely attributed to changes in the US regulatory environment, which have made it far easier for companies to exclude submitted resolution form their published proxy materials if they can be deemed ‘economically irrelevant’ or considered tantamount to micromanagement by shareholders. US companies can exclude proposals via ‘no action requests’ to the Securities and Exchange Commission (SEC), and the PRI data reveals that there has been a sharp uptick in companies taking this route.
In terms of ESG themes, the biggest gap between the US and the rest of the world concerns environmental resolutions. These account for only 23.8% of the total in the US compared with almost half of total resolutions elsewhere. There remains some common ground when it comes to governance, which is the main priority in the US. Governance-related proposals were also the only category to achieve over 50% shareholder support. Although environmental and social themed resolutions have declines, according to the PRI proposals put forward by notable opponents of ESG have received minimal support in terms of votes.
Shareholder proposals that achieve lower than 20% of the vote are generally considered to have failed. During this year’s proxy season 117 resolutions exceeded this threshold, with a further 34 surpassing 50%. According to the PRI, there ahs been a sharp drop in resolutions exceeding 20% compared with 2024. The most successful proposals pertained to shareholder rights, CEO/Chair duality, Board independence, remuneration, and lobbying. Resolutions related to fossil fuel financing averaged just over 20%, with climate change and biodiversity both below 12% on average. The high instances of governance and shareholder rights resolutions were mainly driven by concerned investors in the US.
Climate action retreat and the emergence of AI
The decline in environmentally focused resolutions is compounded by the shift away from action-orientated proposals. The remaining resolutions are generally being filed to encourage greater climate or nature-related disclosure from companies rather that concrete target setting. The PRI data has also revealed an emerging trend for artificial intelligence (AI) themed shareholder proposals. While these remain relatively rare and attract little support, the total amount filed has doubled and one can expect AI to continue climbing the proxy voting agenda in the coming years.
Image courtesy of Leslie Andrachuk on Pixabay
Stockholm (NordSIP) – Newly published analysis of shareholder resolutions and proxy voting by the Principles for Responsible Investment (PRI) reveals global investors shifting priorities. One notable trend is the gradually increasing gap between North America and the rest of the world.
The PRI’s Resolution Database aims to keep track of global shareholder resolutions, management proposals, as well as the resulting votes. Analysis of this year’s proxy season shows that the overall number of sustainability-related resolutions decreased by a quarter versus 2024.
US proxy voting in a state of flux
The sharpest decline was in the United States (US), where only 470 shareholder proposals were filed compared with 709 in 2024. This has been largely attributed to changes in the US regulatory environment, which have made it far easier for companies to exclude submitted resolution form their published proxy materials if they can be deemed ‘economically irrelevant’ or considered tantamount to micromanagement by shareholders. US companies can exclude proposals via ‘no action requests’ to the Securities and Exchange Commission (SEC), and the PRI data reveals that there has been a sharp uptick in companies taking this route.
In terms of ESG themes, the biggest gap between the US and the rest of the world concerns environmental resolutions. These account for only 23.8% of the total in the US compared with almost half of total resolutions elsewhere. There remains some common ground when it comes to governance, which is the main priority in the US. Governance-related proposals were also the only category to achieve over 50% shareholder support. Although environmental and social themed resolutions have declines, according to the PRI proposals put forward by notable opponents of ESG have received minimal support in terms of votes.
Shareholder proposals that achieve lower than 20% of the vote are generally considered to have failed. During this year’s proxy season 117 resolutions exceeded this threshold, with a further 34 surpassing 50%. According to the PRI, there ahs been a sharp drop in resolutions exceeding 20% compared with 2024. The most successful proposals pertained to shareholder rights, CEO/Chair duality, Board independence, remuneration, and lobbying. Resolutions related to fossil fuel financing averaged just over 20%, with climate change and biodiversity both below 12% on average. The high instances of governance and shareholder rights resolutions were mainly driven by concerned investors in the US.
Climate action retreat and the emergence of AI
The decline in environmentally focused resolutions is compounded by the shift away from action-orientated proposals. The remaining resolutions are generally being filed to encourage greater climate or nature-related disclosure from companies rather that concrete target setting. The PRI data has also revealed an emerging trend for artificial intelligence (AI) themed shareholder proposals. While these remain relatively rare and attract little support, the total amount filed has doubled and one can expect AI to continue climbing the proxy voting agenda in the coming years.
Image courtesy of Leslie Andrachuk on Pixabay
