Our key takeaway: Voting in favour of ESG shareholder proposals isn’t always enough to see companies address issues like human rights, equity, climate change and nature loss. In recent research, the UN Principles for Responsible Investment (PRI) found that even majority-supported shareholder ESG proposals are not translating into company action—less than two out of five majority-supported ESG proposals in the 2022 proxy voting season have seen meaningful action and implementation on the part of companies. Investors have a crucial role to play in ensuring that their investees are fulfilling expectations and responsibilities with regard to people and planet, not least as a matter of fiduciary duty. Investors often have considerable leverage to push company action: they can start by defining a framework for what constitutes meaningful action on the part of companies, including time-bound expectations; engaging with companies regularly to follow up on progress and implementation; and ultimately holding boards to account for inaction by voting against board leadership and individual directors.
The UN Principles for Responsible Investment (PRI) published its research, 'Are corporate boards responding to successful shareholder ESG proposals?' (March 2023):