Proxy pressure on environmental issues hits high

[one...two...tree 2,762]

This spring, I wrote an item about the increasing interest in corporate shareholders in sustainability issues, a trend that was detailed in a report from Ernst & Young called “Shareholders press boards on social, environmental risks.” That interest came in the form of proxy resolutions submitted for discussion or action at annual shareholder meetings, which the firm tracks closely.

Ernst & Young recently reached out with an update to that trend: social and environmental resolutions were the subject of a record 40 percent of all shareholder resolutions in 2011.

That was up from 30 percent just one year earlier.

It was actually shy of the 50 percent that Ernst & Young had expected, but there is a positive reason for the decline: some resolutions were withdrawn because those submitting them felt the board had taken “substantive” action on their concerns.

The Ernst & Young sustainability team notes in its update:

“The trend of increased voting support and investor attention indicates to some extent why companies may be open to reaching agreement with shareholders. For example, of the nine proposals on hydraulic tracking submitted this season, half were withdrawn because of company action. The remaining proposals received very high levels of support, averaging more than 40 percent of votes cast; one resolution won support from 49.5 percent of votes cast.”

It all adds up to increased interest in the way that corporate boards consider and manage sustainability of all sorts — social, operational and environmental. Now, we’ll have to see if that shareholder resolve remains in the fact of a stock market correction and a possible double dip in the economy.

http://www.smartplanet.com/blog/business-brains/update-proxy-pressure-on-environmental-issues-hits-high/17851

[elmcitymaven 9,712]

I can't resist replying on something related to proxy voting.

Increasingly boards are realising that making common sense decisions about their sustainability (which can encompass far more than environmental and social issues -- things like robust disaster recovery plans, supply chains and customer satisfaction also loom large) makes good business sense, full stop. I've noticed that since I got into the game in 2003 there's been a real change in both the quantity and quality of sustainability-linked shareholder resolutions. It used to be they were fruit loop ideas that made terrible business sense and were sponsored by the Little Sisters of the Poor; now more often than not they come from mainstream investors who make compelling cases for ideas that will benefit the company's bottom line.

Do I think the economic downturn is going to mean fewer of these resolutions? I don't think so. If anything, I think clued-up investors who can make a good argument in their resolutions for change will still gain traction, but as the article points out, a lot of these resolutions are never coming to the vote in the first place because the companies agree. This is a massive, massive sea change from only a few years ago when I was working on a project relating to how boards talk to their large institutional investors. Dialogue is becoming a greater part of US corporates' toolbox, where once an adversarial tone was more the norm. Whether they listen to what their shareholders say is another matter altogether though!

[one...two...tree 2,762]

You've just upset the Little Sisters of the Poor, M. Be careful when driving thru the barrios - they might do a holy water drive-by on you.

[elmcitymaven 9,712]

I'm just pleased to see something about proxy voting on VJ. As I state in my white paper, Steven...