The proxy season of 2024 unveiled notable transformations in the realm of ESG (Environmental, Social, and Governance) shareholder resolutions. Prominent patterns emerged, underscored by a surge in proposals opposing ESG principles and varying levels of support for different resolution categories. According to data from Morningstar, although the quantity of ESG resolutions increased by 3% in 2024, this growth was predominantly steered by conservative entities filing "anti-ESG" resolutions.
Despite their increasing prevalence, these anti-ESG propositions received minimal endorsement, with the average support plummeting from 9% in 2022 to a mere 2% in 2024. Conversely, resolutions centered on governance experienced a revival, witnessing a rise in support from 30% in 2023 to 35% in 2024 according to the research.
This resurgence signified a return for corporate governance matters, historically pivotal in shareholder assemblies. In contrast, backing for environmental and social resolutions continued its decline, diminishing to 16% from 19% in 2023. Nevertheless, the decrease appears to be decelerating, indicating that while enthusiasm for these resolutions has diminished, it might be stabilizing.
Additionally, the season underscored mounting dissatisfaction among certain companies with the resolution framework, exemplified by ExxonMobil's legal action against filers of environmental and social resolutions. While some institutional investors criticized this stance, others appeared to share ExxonMobil's apprehensions regarding the escalating number of contentious proposals. As proxy voting records are concluded, the complete ramifications of these patterns will become more apparent, providing insights into the evolving landscape of shareholder activism within the ESG domain.
For more detailed insights into the Morning star Proxy voting research, read the full research here
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