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ESG

Shareholder support for climate-change proposals grows in the second half of 2017 – report

Shareholder support for climate-change proposals gained momentum in the second half of 2017, said a joint report from PricewaterhouseCoopers and Broadridge Financial Solutions released Wednesday.

The report, which analyzed votes at 1,040 annual meetings between July 1 and Dec. 31, found that average shareholder support for climate-change proposals rose to 30% in the second half of 2017, up from 27% during the same period in 2016.

PwC and Broadridge noted that a number of climate-change proposals received majority support for the first time in 2017, with large investors like BlackRock (BLK) and Vanguard Group backing two or more proposals. The firms predicted that environmental shareholder proposals would gain even more support in 2018.

Regarding board director elections, the report found that overall support for directors rose to 95% of shares voted on average in the second half of 2017, up from 93% in the second half of 2016. "This could be related generally to strong market performance during 2017," the report's authors said. Of the 3,337 directors that stood for election in the second half of 2017, 318, or 9.5%, failed to achieve support levels of 70% or more compared to 10% of directors who failed to reach that threshold in 2016.

Additionally, 99 directors, or 3%, failed to receive majority support in the second half of 2017, compared 4% in the same period in 2016.

Regarding executive compensation, the report found that average support for say-on-pay proposals fell to 83% in the second half of 2017, down from 84% over the same period in 2016. There were 408 say-on-pay proposals in the second half of 2017.

Twenty-seven companies did not receive majority support for their executive pay packages in the second half of 2017, relatively unchanged from 2016, and 75 companies did not achieve support levels of 70% or more compared to 90 companies in the second half of 2016.

Along with the environment, the report's authors predicted that board diversity will continue to be an area of focus for investors in 2018 and pointed to commitments from New York City Comptroller Scott M. Stringer to push for board diversity and BlackRock's updated voting policies about gender diversity on boards as examples of investors' increased commitments to this area.