From Morningstar: 2024-08-27 06:51:00

In 2024, proxy voting support for E&S resolutions decreased, while governance proposals saw a rebound. Morningstar’s key resolution analysis highlights trends for shareholders picking managers aligned with their ESG values, signaling a decrease in support for ESG proposals by large US asset managers. The population of key resolutions decreased significantly this year.

The number of key E&S resolutions almost halved from 103 to 54 in 2023 and further contracted to 37 in 2024. Average support for key resolutions declined from 36% to 30%, but remains unchanged at 48% adjusted for insiders this year. Resolutions supporting governance issues, like shareholder rights, have gained momentum in 2024.

A new Gold, Silver, and Bronze tier system for E&S resolutions has been implemented, revealing key trends in shareholder support. Resolutions in the Gold tier have over 50% adjusted support, while the Silver tier comprises resolutions with 40-50% support. A growing number of near-miss Bronze tier resolutions show consistent stakeholder backing.

Asset managers continue to assess the quality of E&S resolutions, amid concerns about the shareholder proposal process. The population of well-supported E&S resolutions has shrunk, while conventional resolutions with less support have increased. The future of shareholder democracy is uncertain, with challenges to the SEC’s authority and process looming.

A detailed analysis on key resolutions, support tiers, and voting records will be released in September. Deep dives into governance and E&S resolution trends will follow. Investors seeking to align with environmental and social priorities can leverage this information for manager selection decisions in the future. No shares in mentioned securities are owned by the authors.



Read more at Morningstar: Proxy Season 2024: Which ESG Proposals Made The Podium?