ISS issues a 10-year retrospective on shareholder proposals

Here’s a blog by Dave Lynn on TheCorporateCounsel.net:

“Yesterday, ISS-Corporate released a well-timed report on a very scary topic for many companies: shareholder proposals. The report is titled “U.S. Shareholder Proposals: A Decade in Motion,” and the press release announcing the report notes:

ISS-Corporate, a leading provider of compensation, governance, cyber risk monitoring, and sustainability offerings to help companies improve shareholder value and reduce risk, today announced the findings of an in-depth analysis of shareholder proposals submitted at U.S. public companies over a 10-year period running from July 2014 through June 2024. The analysis examines investor sentiment around assessing environmental, social, and governance (ESG) risks via the volume and support levels of different types of such proposals and looks at the underlying patterns of corporate behavior and disclosures driving shareholders’ ESG campaigns. Amid intensifying debate around the value of ESG and the emergence of shareholder campaigns that seek to counter corporate action on environmental and sustainability topics, the report investigates how the debate around ESG has impacted investor sentiment and shaped corporate practices more broadly.

Some of the key finding of the report include:

– Proposals related to E&S topics accounted for 62 percent of the total proposals submitted by shareholders in 2024, up from 44 percent a decade earlier.

– Support levels for E&S shareholder proposals have decreased since peaking in 2021, but this does not necessarily indicate a de-prioritization of sustainability factors for many investors.

– Shareholder campaigns tend to target large-cap firms, and these companies have made particularly significant strides over the last several years in the quality of their sustainability disclosures and practices and corporate governance practices.

– Anti-ESG proposals made up approximately 11 percent of the total shareholder proposals submitted in 2024 – up from around 2 percent of submitted requests from July 2014 to June 2021 – but average support levels remain in the low single digits at 1.7 percent of votes cast during the last three years.

All signs point to yet another very active proxy season for shareholder proposals, so buckle up and get ready!”