As the 2023 annual general meeting season gets underway, institutional investors increasingly will hold corporate directors responsible when progress doesn't come fast enough on environmental, social and governance issues, following a 2022 proxy season that sent clear signals.
This year's growing list, while still dominated by how companies are addressing climate change, includes biodiversity, board diversity, racial equity and executive compensation. Some shareholders also want to see companies address cost-of-living challenges exacerbated by the war in Ukraine and an uneven post-pandemic recovery.
"We are expecting to see a lot (of ESG shareholder proposals) this year. We do expect boards to take them seriously," said Amy Wilson, London-based engagement lead for Europe with EOS at Federated Hermes Ltd., with $669 billion under management.
Last year, 30% of corporate directors in Russell 3000 companies up for election got less than 95% support from shareholders. While still a high level of support, votes under 100% can signal concerns.
Another telling vote, on executive compensation, saw average support at companies in the S&P 500 and Russell 3000 hit record lows, according to PricewaterhouseCoopers, which said that the reduced support "makes it clear that shareholders are scrutinizing board actions more than they have in the past."