Intelligize’s “E&S Shareholder Proposals After the SEC’s Policy Shift” documents the impact on environmental and social (E&S) shareholder proposal activity resulting from the SEC’s Rule 14a-8 policy shift in November 2021 that was reflected in Staff Legal Bulletin 14L (we reported on here). The SEC’s rejection of companies’ no-action requests to exclude E&S proposals more than doubled in proxy season 2022 compared to proxy season 2021 and its no-action grants declined by more than 50%, as shown here:Several types of E&S proposals increased in prevalence by more than 200% year-over-year:
However, quantity doesn’t equal quality. Several big-name institutional investors announced their reduced support for shareholder E&S proposals in the 2022 proxy season based on their reduced quality, overly prescriptive nature, and/or micromanagement corncerns. (See our prior reports: “BlackRock's Support for Climate Shareholder Proposals Likely to Drop in 2022,” “Vanguard Speaks! Shareholder Returns Remain Paramount,” and “State Street: Director Accountability Trumps Shareholder Proposal Support.”) More than one-quarter of E&S proposals voted in 2021 garnered majority shareholder support compared to just 6% in 2022.
See Intelligize’s release and additional resources on our Shareholder Proposals and Proxy & Annual Reporting Season 2022 pages. This post first appeared in the weekly Society Alert!