Bloomberg reported, citing statistics from the Sustainable Investments Institute, that shareholder support for resolutions linked to Environmental, social, and corporate governance (ESG) problems plummeted to just 22% through Thursday, down from a peak of 33% in 2021.
Due in large part to Republican opposition, shareholders this year have voiced far less support than last year for resolutions encouraging firms to take action on climate change and social concerns.
According to Heidi Welsh, executive director of the Sustainable Investments Institute, Republican opposition to ESG investment has been a “wrecking ball,” contributing to a “striking” fall in shareholder support for ESG problems.
She said that the decline in support was generalized. The number of environmental, social, and governance (ESG) resolutions has dropped from 283 last year to 240.
At Bloomberg Intelligence, a senior ESG analyst, Rob Du Boff, told the media outlet that shareholder resolutions have been more aggressive in recent years. This is in addition to the pressure from the Republican Party, which has resulted in red states withdrawing billions from and blacklisting financial firms devoted to ESG investment.
Rules restricting shareholders’ capacity to make ESG-related suggestions were relaxed by the U.S. Securities and Exchange Commission in 2021, leading to a dramatic surge in more radical proposals.
According to Du Boff, “the support levels appear to be dwindling” based on the statistics alone.
Shareholder support for environmental resolutions has dropped to 25% from 43% for the entire year last year, according to data from business consultant company Georgeson until mid-May, as reported by Reuters. Support for socially conscious resolutions plummeted to 20% this year, down from 26% in 2022 and 33% in 2021.
According to Reuters, a “dampening effect” on shareholder support for such resolutions is indicative of shareholders finding them too onerous, according to Georgeson Strategist Kilian Moote.
A measure was just enacted in Texas that will prevent insurance companies from using ESG factors as a rating factor.
