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Planet Tracker
With the US proxy season well under way, latest research by financial think tank Planet Tracker indicates that critical ESG issues, such as plastic pollution and declining biodiversity, rarely make it on to the agenda – posing a fundamental concern for the investors represented by institutional investment giants, such as BlackRock and Vanguard.
In an analysis of proposals submitted and votes cast from 2012-2021, Planet Tracker found that, despite a rising trend in ESG proposals over the last decade, the vast majority were for governance-related topics, and many of these to ensure compliance – such as approving minutes and auditors.. Social and environmental factors, meanwhile, comprised only 5% and 2% of these proposals respectively.
Perhaps most disturbingly, many important issues never or rarely make the annual shareholder meetings: over the last five years, for example, plastic issues have been raised only eight times and the word ‘biodiversity’ has only once made the agenda.
What’s more, investment giants, including State Street, UBS, Vanguard and BlackRock, hold a significant number of votes at these proxy meetings due to the size of the funds under their management, giving them considerable sway over the approval of proposals. While their public statements make them appear committed to responsible ownership and stewardship, these top asset managers often struggle to present a unified approach, voting very differently by region.
John Willis, Director of Research at Planet Tracker, comments: “Planet Tracker welcomes the growing importance of ESG proposals at shareholder meetings. However, the ESG headline figures for these annual meetings over the past decade can deceive. Hopefully, this year we will witness a new momentum on an assortment of ESG issues, not least on environmental topics where many CEOs have made public statements on net zero targets.
“But we note the scarcity of proposals on a number of important global issues. If the investment giants are unprepared to engage with corporates on these topics, they should promptly introduce direct voting for the many investors they represent”.
