ESG resolutions continue to gain shareholder support

Environmental and social shareholder resolutions have gained on average 30% support so far in 2019, up 6 percentage points from 2018 and its highest reading in the past 16 years. Research from Morningstar shows that among the major themes of such resolutions, human rights disclosures are the most supported ballot items, followed by disclosure of workplace and board diversity.

Since 2017, support for disclosure surrounding political spending and lobbying activity has notably increased. Among the related votes in 2019, an average of 37% of shareholders voted in favor of political spending disclosure, while 31% were in favor of more transparency surrounding company lobbying activity.

The researchers noted that much of the decline in 2018 and 2019 in total resolutions voted on was attributed to fewer environmental issues being taken to a vote. They added that this might be the result of more companies engaging better with shareholders on these issue, which eliminated the need for a vote, while changes in SEC rules also allowed companies to leave climate-risk issues off their ballots. Exxon Mobil was among the companies allowed to not include climate-risk resolutions on their proxy ballots in 2019.

As of early June, 188 environmental and social related votes have been proposed, already ahead of 2018's 178, but still down from 2016's peak.