Julie Gorte: Linking Investor Engagement with Financial Value, July 2019.

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Julie Gorte, Impax Asset Management

Some observers tend to see vote totals on shareholder proposals as binary — either they pass or they don’t. But it is useful to understand the nuances, too. In accounting, a shareholder holding at least 20 percent of a company’s shares has a significant or active interest, and that is something that can influence management decisions. That provides a different lens through which to see the 30 percent average support for shareholder proposals than a simple pass/no pass view. It’s also an indicator that it’s not just a bunch of frustrated political activists interested in these proposals; it’s an indication that a significant proportion of a company’s investors see them as relevant to the company’s financial performance.

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Kosmas Papadopoulos, ISS Analytics: ISS Discusses U.S. Proxy Voting Trends from 2000 to 2018: Environmental and Social Issues, February 2019

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Kosmas Papadopoulos, Managing Editor, ISS Analytics

Based on our analysis, the most significant change in investors’ voting behavior pertains to environmental and social issues, as these proposals are earning record levels of support in recent years. . . . The main drivers for changes in voting patterns on environmental and social issues are:

  • Increased momentum of UN PRI and other global policy initiatives focusing on ESG integration in finance;

  • Transition of debate on environmental and social issues from a values-based argument to longterm economic value and risk management; and

  • Urgency for action to tackle climate change, which was universally recognized as a significant risk and policy priority through the 2015 Paris Agreement.

As a result of these pressures, the data indicates a number of changes in proponent filings and proxy voting behavior on shareholder proposals:

  • More shareholders voting in support of environmental & social proposals, witnessed by the rapidly growing proportion of shareholder proposals receiving at least 30-percent support; and 

  • Increased willingness of companies and proponents to work together to forge a solution, supported by a record proportion of environmental and social proposals being withdrawn prior to the vote.

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Investors Persuade Midwest Utilities To Address Climate Change

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Seventh Generation Interfaith Coalition for Responsible Investment

Seventh Generation Interfaith Coalition for Responsible Investment

Seventh Generation Interfaith (SGI) is a coalition of 40 faith-based and values-driven institutional investors located in the Mid-Western United States. Shareholder proposals have had a major impact on midwestern utility companies. Proposals submitted to the WEC Energy Group and CMS Energy Corporation asked  each to publish an assessment of the long term impacts on the company’s portfolio of public policies and technological advances consistent with limiting global warming to no more than two degrees Celsius over pre-industrial levels.   The proposals were withdrawn upon company commitments and subsequent publishing of scenario analyses, and leading to aggressive GHG reduction goals.  (See CMS Energy Climate Assessment Report;  WEC Pathway to a Cleaner Energy Future).  Engagement with Xcel Energy preceded a groundbreaking announcement of the company’s commitment to zero-carbon electricity by 2050 and  publishing of their Carbon Report (Xcel Energy Building a Carbon-free Future). A proposal at MGE Energy, subsequently withdrawn, also led to their announced commitment to net-zero carbon electricity (Wisconsin State Journal, May 14, 2019). 

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