According to its recently released “2021 ESG Investing Annual Report,” on a worldwide basis, T. Rowe Price supported 20% of social shareholder proposals, 34% of environmental shareholder proposals, and 32% of political spending & lobbying proposals, in 2021. In the Americas specifically, which is where the majority of its proxy voting activity was concentrated, T. Rowe Price supported 32% of the 185 total environmental, social, and/or political shareholder proposals.Notably, the report comments on the significant variability in quality of shareholder proposals “particularly where the parameters allowing resolutions are less demanding”:
Resolutions filed by individual investors tend to be lower quality (less substantive, poorly targeted, or address issues that are not material), while those filed by large, institutional investors are usually more substantive and typically warrant more detailed consideration. The quality of the resolutions is often reflected in the overall regional support secured.
Of 788 engagements in 2021, 55% were with Americas-domiciled companies. By category, 56% were governance-related, followed by environmental (23%) and social (21%). The top five E, S, and G, engagement topics are shown here:
In the report and accompanying release, T. Rowe discusses its focus on engagement to foster better alignment between companies’ stated objectives and their corporate political activities, which, in its view, encompasses, e.g., political spending, lobbying (both directly and indirectly through membership associations), management’s public statements on social issues, the company’s expression of views on societal issues via media channels that may influence public perception, and the company’s participation in the rulemaking comment process. It reportedly is developing a “tool” to better detect misalignments between companies’ stated objectives and values and their political activities for this purpose.
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This post first appeared in the weekly Society Alert!