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As You Sow-led Proxy Preview 2024 exhibits firms will face requests on a widening vary of points this AGM season, regardless of current falls in assist for ESG resolutions.
Shareholder proposals on biodiversity and AI are among the many key themes highlighted in shareholder advocacy NGO As You Sow’s (AYS) newly launched Proxy Preview 2024.
The report, revealed alongside the Sustainable Investments Institute (Si2) and Proxy Influence, reviewed at the very least 527 shareholder resolutions filed on ESG points for the present proxy season.
The atmosphere stays a central shareholder concern with greater than 190 proposals filed, a close to 20% enhance on 2023. Resolutions tackle quite a lot of particular dangers together with local weather change, plastic air pollution, and the vulnerabilities of agricultural provide chains.
The preview flagged that US shareholders are utilizing proposals for the primary time to boost issues over the impression of biodiversity loss on their portfolios. 5 corporations face questions that invoke Taskforce on Nature-Associated Monetary Disclosures suggestions to guard biodiversity and nature launched final September, requesting a biodiversity impression and dependency evaluation.
These embody proposals from Domini Influence Investments to House Depot and Worldwide Paper asking every to “conduct and disclose a biodiversity impression and dependency evaluation”. The impression investor has requested House Depot to incorporate “the complete worth chain and use of bought merchandise, to tell its technique to stop adverse impacts on biodiversity”. Individually, it referred to as for Worldwide Paper to report on “the degradation of high-integrity forests”.
“Shareholder advocacy and sustainable investing is resilient and rising as firms and buyers proceed to evaluate and tackle ESG threat as a part of basic enterprise practices and to fulfil their fiduciary responsibility,” stated Andrew Behar, CEO at AYS. “New shareholder resolutions this 12 months invoke the rights of nature and defend virgin ecosystems, alongside modern concepts on local weather change.”
AI proposals flag political, governance issues
Alongside biodiversity, AI and its implications on enterprise was spotlighted by the preview as being an “solely new challenge for proxy season”. 13 proposals search to problem expertise and media firms, together with Alphabet and Meta, on guiding moral ideas on synthetic intelligence, misinformation, and human rights impacts.
The report pointed to 2 proposals particularly as overlaying new floor. The primary targeted on how international political dangers could also be exacerbated by on-line content material hosted by Meta. The second, filed by AYS, requested Meta to ban political advertisements forward of November’s US normal election to fight divisiveness and misinformation as overlaying new floor.
Nearly all of the proposals had been filed by the pension belief of American Federation of Labor and Congress of Industrial Organizations (AFL-CIO). These requested that tech and media firms make disclosures or present stories on the moral ideas they’re using to information using AI of their companies.
On the finish of final month, Apple confronted a proposal requesting it publish a transparency report on using AI in its enterprise operations. The proposal acquired 37.5% of votes regardless of the corporate having suggested its shareholders to vote towards.
“Buyers proceed to boost robust issues in regards to the tech business’s outsized impression on society,” stated Michael Passoff, CEO of Proxy Influence and the preview’s co-author. “Shareholders are calling for extra transparency and accountability on essential social points similar to political election disinformation and the exponential progress of on-line little one sexual exploitation.”
World tendencies
The 527 shareholder proposals filed this 12 months is marginally down from 536 final 12 months on the identical level final 12 months, however it’s nonetheless potential the ultimate whole will attain 630 like in 2023 and 2022. Institutional Shareholder Companies (ISS) Governance’s 2024 World Outlook Report not too long ago projected that US environmental and social shareholder proposals might match or surpass the report quantity reached final 12 months.
Social points, together with company political affect, office variety, fairness, and inclusion, and human and labour rights comprise 52% of this 12 months’s shareholder proposals.
The preview did nonetheless be aware assist ranges for shareholder proposals had “fallen considerably” on common within the final two years. Help for pro-ESG proposals dropped to 21.5% final 12 months in comparison with the all-time excessive of 33.3% in 2021 The report said this was “largely as a result of the most important asset managers have stopped supporting as many proposals”.
ISS Governance’s report additionally noticed shareholder assist for environmental and social proposals decline for a second consecutive 12 months. These proposals garnered 18.7% in assist on common, down from 26.2% in 2022.
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