Support for environmental and social shareholder proposals more than doubled in average support to 21% in 2011 from 10% in 2005, according to an analysis of Russell 3000 companies released Tuesday by the Investor Responsibility Research Center Institute.
The proportion of environmental and social shareholder proposals going to a vote rose by a third to 40% from 30% of all shareholder proposals that came to a vote in the seven-year period.
While support varied significantly for individual proposals, five such proposals received majority support in 2011 compared to one proposal in 2005, according to a 20-page report, “Key Characteristics of Prominent Shareholder-Sponsored Proposals on Environmental and Social Topics, 2005-2011.”
Ernst & Young was the primary research firm for and a contributor to the report, commissioned by the IRRC Institute. Analysis was based on 1,273 shareholder proposals on environmental and social issues that came for a vote during the period.
“Investor attitudes about extra-financial issues seem to be undergoing a sea change,” Jon Lukomnik, IRRCI executive director, said in a statement about the report. “It wasn't that long ago that these were regarded by most mainstream investors as abstract issues, viewed as only tenuously linked to bottom-line concerns. Today, however, an increasing number of investors seem to regard some (environmental and social) proposals as an early warning system for issues that will demand attention from corporate managements and boards because of the implications for corporate sustainability and long-term shareholder value.”
The report is available on the IRRC Institute's website.