Companies seeking to improve their environmental, social and governance credentials have focused on the governance aspect to the detriment of environmental and/or social issues.
The research, conducted by financial think tank Planet Tracker, analyzed more than 12,000 proposals and votes cast between 2012 and 2021, and found there was an 80% increase in proposals submitted at annual meetings of shareholders over the past decade.
Yet environmental and sustainability issues were rarely on the agenda at shareholder meetings, at 2% and 5%, respectively.
Planet Tracker has discovered that in the past five years, concerns about plastic have only been raised eight times and the word ‘biodiversity’ has only been on the agenda once. time.
Public statements by companies make them appear committed to responsible ownership and management, top asset managers often struggle to present a unified approach, voting very differently in different regions, the research added.
John Willis, Director of Research at Planet Tracker, comments: “Planet Tracker welcomes the growing importance of ESG proposals at shareholder meetings. However, the big ESG numbers from these annual meetings over the past decade can be misleading.
“Hopefully this year we will see further momentum on an assortment of ESG issues, including on environmental topics where many CEOs have made public statements about net zero goals.”
However, he noted the paucity of proposals on a number of important global issues.
Wills added, “If the investment giants are unprepared to engage with companies on these topics, they should quickly introduce direct voting for the many investors they represent.”
It comes at the same time as private bank Coutts reports that UK millionaires are prioritizing micro-efforts, such as recycling, as an environmentally friendly method over their investments, as 85% have not made changes to their investment portfolio.
Leslie Gent, Head of Responsible Investing at Coutts, said: “We know from talking to our clients that they want to do their best for the planet.
“But what our research reveals is that many UK millionaires don’t realize they can make a much bigger difference to the planet with their investments and pensions than by sorting out their recycling.”
“We urge people to have a simple conversation with those who look after their money, starting with their pension fund, about the impacts their investments can and are having.”
Mollie Thornton, Senior Investment Manager at Parmenion, said: “It’s good to see a significant increase in shareholder proposals on ESG topics in recent years.”