There has been a surge in what some observers call “anti-ESG” shareholder proposals, proposals that are very similar to other ESG resolutions, but have been put forward by conservative proponents, and that they could be considered for future voting. There is a widely held expectation that it will be a feature of the exercise of rights. Season.
The topic was one of the topics discussed at the recent Corporate Secretariat Forum in New York, where governance experts came together to share insights on issues impacting the community as we head into 2023.
The recent surge in anti-ESG shareholder proposals has been seen primarily in, but not limited to, social and environmental areas. According to Georgeson’s research, the 2022 voting season saw twice as many submissions from anti-ESG proponents (52) as he did in 2021 (26). In many cases, such resolutions are similar or nearly identical to those of his ESG advocates, although supporting statements may indicate different motivations.
These conservative proposals did not garner the same level of support as their ESG-friendly counterparts (according to Georgeson, they received an average of 9.5% support).
Jonathan Haymon, vice president and director of proxy voting at Federated Hermes, said at a time when ESG was facing backlash from right-wing state auditors and accountants, he said, “We’re looking for a more conservative ESG strategy.” The proposal will stick,” he told the forum attendees.
14A-8 Change
The SEC has proposed changes to Rule 14a-8. It governs the process by which the agency decides whether to grant no-action relief to companies that seek to omit proposals from powers of attorney. In the past, companies that submitted similar proposals first made it relatively easy to filter out similar proposals submitted later in the season, even if they had different intentions.
Haymon believes that if the committee approves an update to the “overlapping” criteria, it will increase the number of similar proposals from both ESG and anti-ESG advocates appearing in the same company’s proxy statement. said there is.
Low support for ESG proposals by conservative groups suggests that investors are aware of the various motivations of proponents, but companies always identify groups in their proxy statements. It doesn’t mean there is.
Haymon said Federated Hermes is interested in who its supporters are, but doesn’t need to disclose their motives. He acknowledged that this was not the view of the majority and that many of his peers were voting based on the identities of their supporters.
Josh Black, editor-in-chief of Diligent’s brand Insightia, said that getting proposals from the other side of an issue makes it more difficult for companies to negotiate with the proposers, so more measures are put to the ballot. I am commenting.
As the number of proposals featured in the proxy statements of some high-profile companies grows, the group feels that the resolution has received less support in the ballot and that the message is lost in the crowd. He added that it is possible.
Black suggested that this could lead people to try more “media-friendly” tactics to gain attention, such as writing letters criticizing the company. There are often no direct requests to seek, and it is difficult for boards to act other than to offer a broad defense, he said, and some may choose to keep a low profile on ESG issues. I added no.
