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Jul 05, 2024

Record-breaking shareholder proposals in 2024 focus on ESG and anti-ESG matters

First proposals for biodiversity and AI recorded this year, says Georgeson

Investors’ ESG and anti-ESG proposals at AGMs have broken records so far in 2024, increasing by 5.2 percent on 2023’s numbers.

Anti-ESG proposals drive the overall new trend, rising by 19 percent from 94 in 2023 to 113 in 2024 and marking a notable 90 percent increase on 2022. This is according to preliminary data from Georgeson’s early proxy season 2024 review, based on available annual meeting results gathered from July 2023 through May 2024.

Within the anti-ESG segment, social-related proposals represent the majority (71 percent) of anti-ESG proposals in 2024, followed by governance-related ones (15 percent) and environmental-focused ones (13 percent).

Despite the uptick, average support for these proposals remains low. ‘As in previous seasons, none of these proposals has received a majority,’ notes the report, highlighting that average support for all anti-ESG proposals stands at 2.8 percent.

Regarding ESG-related proposals, the report finds governance proposals have surged by 18 percent year on year, with shareholder support also rising significantly. Environmental and social proposals, however, have both recorded a year-on-year plunge, dipping by 6 percent and 5 percent, respectively.

New subtypes

Georgeson’s review records new ‘subtypes’ of proposals, including AI, which recorded 12 submissions – and two votes, at Apple and Microsoft – and biodiversity, which recorded 15 submissions. The latter, notes the report, is likely linked to investors’ growing interest in nature-related issues and disclosures and is also in line with the recommendations released in September 2023 by the Taskforce on Nature-related Financial Disclosures.

Health & safety is also a new entry this season, with 16 proposals submitted so far across a wide array of industries.

Greenhouse gas reduction proposals focusing on Scope 1 and Scope 2 emissions have received higher support (35 percent) than those including Scope 3 emissions (23 percent). Compensation-related proposals have seen a decline in support, particularly those addressing executive severance payments, dropping to an average of 12 percent support from 48 percent last year.

‘This decline in average support correlates with the trend on recommendation for such proposals by ISS and Glass Lewis,’ notes the report. ‘During the 2022 and 2023 seasons, both advisers recommended roughly half of voted proposals. In 2024, support decreased significantly as ISS recommended 17 percent and Glass Lewis 21 percent of proposals.’