ESG has historically profound impact on 2021 US AGM Season

What is driving the change in investor voting?

In the 2021 season, investors’ continuing and growing focus on environmental, social and governance risks (ESG) and opportunities was evident in how they voted at US public company* annual meetings, according to voting statistics. There was a groundbreaking and rapid shift in investor voting on shareholder proposals and director elections year over year.

Investors are more focused on issuer ESG risks and opportunities than ever before

Average support for shareholder proposals increased across environmental, social and governance categories, with the largest year over year increase seen in environmental proposals. This ties to the trend of investors paying closer attention to climate-related issues in portfolio companies and updating proxy voting and stewardship guidelines accordingly.

Record-breaking number of environmental shareholder proposals passed this season with unprecedented levels of support

In 2021, 13 of the 36 environmental shareholder proposals that reached a vote passed, which represents over 36% and is more than double the number that passed in the 2020 proxy season.

S&P 1500 Environmental Proposals Voted with Average Shareholder Support, 2019—2021

Workforce diversity-focused shareholder proposals have seen exponential growth in submissions over the past few seasons

While average support for directors remained consistent with 2020, there was an increase in the number of directors receiving less than 90% support for their (re)election.

S&P 1500 PROPOSALS VOTED AND AVERAGE SHAREHOLDER SUPPORT, 2019-2021

* Companies in the S&P 1500

This year, investors increasingly adopted voting policies to hold directors accountable for lack of disclosure and/or progress on board diversity, as well as poor risk oversight of environmental and social issues.

Our voting analysis confirmed BlackRock, Vanguard and State Street voted against or withhold on almost twice as many S&P 500 directors as it did in 2020.

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Board diversity and disclosure of ESG issues increasingly influence votes against directors

Most companies opted for a virtual meeting again during the 2021 proxy season

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Workforce Diversity Proposals

As risks around travel and large gatherings remained, most companies that opted for a virtual meeting last season did so again. With the increase in virtual meetings, sustained now for a second season, emerging trends and best practice are shaping the future of shareholder meetings.

Say-on-Pay failure rate increased sharply to 3.3% (48 companies) in 2021 compared to 1.7% (26 companies) in 2020

S&P 1500 Say-on-Pay Proposals with Average Support, 2019—2021

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View Workforce Diversity Proposals table

Environmental

Social

Governance

Click on the tiles to learn more

740

711

694

740

777

694

740

777

694

View Environmental Proposals Voted

2019

2020

2021

Average Shareholder Support

90.9%

91.1%

90.5%

694

711

740

374

116

394

180

432

167

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