Investor voting on shareholder proposals about social and environmental issues and related corporate governance shifted in 2023. The number of proposals voted soared ever higher, outstripping withdrawals, while no-action omissions stayed at historic lows. By the end of the year, proponents had filed 630 proposals and there were 368 votes, 209 withdrawals and only 44 omissions; nine more did not go to votes for other reasons.1
Average support for proposals seeking corporate action or disclosure plummeted to 21.5 percent, down one-third from the 2021 apex of 33.3 percent. The volume of anti-ESG proposals rose sharply but received only 2.5 percent average support.
Far fewer majority votes on pro-ESG topics occurred. This erosion in support hit climate change proposals the hardest, even as global climate catastrophes increased. Votes dropped across the board on almost all other issues, with only lobbying and some specific human capital management resolutions earning support comparable to previous years’ levels. The reasons for the shift seem to have come from a combination of political pressure leading to pull-backs from the biggest investors combined with shifting regulations, different types of proposals and a chill from ESG opponents—particularly from statehouse political and legal maneuvers.
Persistent themes: Climate change, corporate political influence, and diversity (on the board, in the workplace, and in compensation) remained the dominant themes but there were many new angles. There was a sharp increase in the number of proposals favoring climate change and others opposing ESG consideration, with fewer on corporate political influence and decent work. (See pie chart, which excludes nine more on ethical finance and animal welfare.)
Highest votes: More than three dozen proposals earned majority support in 2021 and 2022, but only nine did in 2023. The number of proposals just below 50 percent also dropped notably. (Table lists all 2023 votes over 40 percent.)
Environment
Climate change continued to be the biggest single topic, with 139 proposals, up from 121 in 2022. Thirty-eight more were about additional environmental management concerns. (Others discussed below also addressed climate-related angles on political influence, board oversight and sustainability management.)
Climate change: Many of the GHG emissions proposals had a notably consistent approach, with some new and fairly specific proposals that often asked about Scope 3 emissions that are harder to measure and outside companies’ direct control. In all, 85 focused on emissions reporting and target setting. Others asked about strategy and risk assessment, with 24 on carbon finance, 14 about various impact disclosures and nine others about other transition planning and accounting issues. On deforestation, just one of 10 went to a vote because companies agreed to more reporting and proponents withdrew.
Votes—The average vote dropped to 22.3 percent, down from an apex of just over 50 percent in 2021, although there were notable high votes that included 74 percent for methane reporting at Coterra Energy and 41 percent for a similar proposal at Targa Resources. On GHG reporting and goals, votes were 40 percent at Texas Roadhouse, 43 percent at Bloomin’ Brands and 48 percent at Quest Diagnostics. Requests for carbon finance disclosure fared relatively better (27 percent on average) than those about investment restrictions (only 8 percent on average).
Withdrawals—Agreements kept proposals off proxy ballots with new company commitments to limit their climate impacts continued. There were about six dozen withdrawals, about even with 2022. Most (around 50) were about adopting and reporting on GHG targets, with a handful on climate strategy and risk assessment. Several methane withdrawals came after companies agreed to join an industry initiative to improve monitoring.
Notable omission—At Chubb, a proposal asking for limits on fossil fuel underwriting was omitted on ordinary business grounds, with SEC staff agreeing that the insurer is best placed to make decisions on how it will do business. This may presage a tightening of the staff’s willingness to accept more specific proposals. This seems to be showing up in a few early 2024 omissions on climate change where proposals are fairly detailed.
Environmental management: There were 38 environmental management proposals, down 10 from 2022. About half were on various agricultural practices, while others raised longstanding questions about plastics and waste.
1. Figures exclude corporate governance topics, which have receded in numbers and generally get higher levels of support; anti-ESG groups also filed a small number of such proposals and earned slightly more for them than on environmental and social issues. Law firms tracking all proposals estimate that about another 250 governance proposals were filed in 2023, beyond what is included in this discussion.
Agriculture—The Humane Society of the United States, People for the Ethical Treatment of Animals and various allies asked about the treatment of animals in the food supply chain, with the highest votes on cage-free eggs (36.4 percent at Dollar General) and compliance with stated animal welfare standards (38.6 percent at McDonald’s). A common theme was asking companies to follow through on previous commitments where reporting appears to be lagging or targets have been missed.
A few resolutions about antibiotics and pesticides included a new proposal asking three food companies to comply with antimicrobial guidelines from the World Health Organization; the highest vote was 18.7 percent at McDonald’s.
Plastics—As You Sow and Green Century continued to press for more disclosure from a dozen producers and users of plastics about their goals to reduce; half were resubmissions. Most votes were over 25 percent, with the highest at Yum Brands (36.9 percent), plus three withdrawals.
Chemicals and water—Costco and Walt Disney agreed to report more fully on their chemical reduction efforts, prompting withdrawals. Essential Utilities responded to a request about water contamination by agreeing to make public the test results for its wells and water systems.
Social Issues
Animal testing: PETA earned its highest vote of 35.8 percent at Charles River Labs for a resolution about the welfare of non-human primates imported to and transported in the United States, warning about public health risks and harm to wild primate populations.
Corporate political influence: The shift in political influence proposals continued, with far more (about 40) regarding mismatches between corporate policies and recipients’ viewpoints, exceeding the number more specifically on lobbying (about 30) and elections (just 26).
Votes—The newer values congruency proposals looking at corporate policies out of kilter with political expenditures blossomed but outcomes were mixed and lower than in the past; resubmissions for the most part earned less than in 2022. Regarding elections, they did best when focused on how campaign spending aligns with corporate policy (averaging 30 percent) and less when asking about all influence spending (about 18 percent). The highest vote of 41 percent came at Leidos Holdings, an IT services firm. Proposals about climate change lobbying averaged 35 percent—including a 95 percent vote at NY Community Bancorp (with board support) and 47 percent at commercial truck maker PACCAR.
Investor appetite for board oversight and disclosure about lobbying in general remained strong, with average support unchanged at about 32 percent; high votes included one majority at McDonald’s, 49.5 percent at Stride, 48 percent at IBM and 42 percent at Yum Brands.
On election spending, years of pressure have produced widespread board commitments to oversight and disclosure, so the number of proposals has been falling; agreements continued. The six votes averaged about 30 percent, down from 44 percent in 2021, although two were above 40 percent (Amphenol and Caesars Entertainment). The new push for more disclosure of indirect spending did not gain any traction, however: the highest of three votes was just 8 percent.
Notable withdrawals—A groundbreaking withdrawal agreement means AT&T, which spends generously all over the country, will assess the extent to which its spending in elections aligns with corporate policy. United Parcel Service also reached a wide-ranging agreement to report more on its political giving. One of the eight lobbying withdrawals was at Travelers, where there had been a majority vote in 2022.
Decent work: Fifty-one proposals (down from 74 in 2022) asked about fair pay, working conditions and benefits. In all, there were 31 votes, 15 withdrawals after agreements and five omissions.
Votes—Investor support for decent work proposals held fairly steady, a bright spot for proponents—averaging 26 percent, the same as in 2021, but a few points down from 2022. Ten proposals seeking information on race and gender pay disparities earned 34 percent on average, with 51.9 percent at Kroger and 47.4 percent at Boeing.
Some proposals on working conditions earned considerable support. After fines and widespread worker safety violations at Dollar General the vote was 68 percent for a safety audit; a similar proposal earned 35.4 percent at Amazon.com, with its enduring controversies about warehouse employees’ safety. At Wells Fargo, investors gave 55 percent support to a new proposal from NYSCRF seeking specific metrics about harassment and discrimination; the bank has inflated diversity recruitment statistics and its problematic sales culture responsible for defrauding customers led to a $1 billion settlement just about when investors were voting.
Benefits proposals did not fare quite as well, with the highest vote of 26.2 percent on a resubmitted resolution asking for a paid sick leave policy at CVS Health.
Withdrawals—Agreements to produce more information prompted five gender/racial pay disparity withdrawals. Four companies also agreed to report on the use of concealment clauses that can hide malfeasance with harassment and discrimination. Proponents withdrew several sick leave proposals after companies agreed to report more, as well.
Diversity in the workplace: The number of proposals seeking diversity information continued to fall, since many more companies now routinely release data and explain their programs. In 2023, there were 40 resolutions on workplace diversity, 28 withdrawals and a dozen votes. Average support was 22 percent, down sharply from 46.8 percent two years ago for a slightly different mix of requests.
Votes—The highest vote was 57 percent, for a proposal that asked shipper Expeditors International of Washington for more information on its diversity programs; it currently says little. A new proposal from NorthStar Asset Management about how companies consider the criminal record of applicants earned modest support—in the high teens—at three companies.
Withdrawals—Workplace diversity proposals were most notable for what did not go to votes—proponents withdrew 28 after a busy season of negotiations driven by a common understanding between investors and companies that strong diversity management gives a key competitive advantage in our increasingly diverse country.
Ethical finance: Oxfam America and others continued a push to support compliance with the Global Reporting Initiative’s (GRI) Tax Standard, given concerns that companies do not pay their fair share to the public treasury when they send profits offshore. Votes were in the mid-teens, with the highest vote of 17.7 percent for a resubmission at Amazon.com.
Health: Investors faced a much larger array of proposals about health, driven by barriers to care that are political and related to cost. In the end, proponents filed 45 proposals, with two dozen on reproductive health, a dozen more on pharmaceuticals and five others. Nearly 30 went to votes and 16 were withdrawn.
Reproductive rights—Resolutions coordinated by Rhia Ventures asked how companies are navigating the new landscape of abortion restrictions and related maternal health problems that has followed the end of federal abortion protections following the June 2022 Dobbs Supreme Court decision. But investor appetite for corporate action seemed limited, with the vote averaging about 11 percent in 2023, down from twice that the year before. Still, 12 withdrawals were a testament to productive negotiations; companies explained their benefits and agreed to report on risks, including those about digital privacy. Reproductive rights advocates also filed many of the values congruency political influence proposals and promise to continue. (Si2 has documented how state-level political money associated with companies flows disproportionately to red states and underwrites supermajorities there where many of the new restrictive reproductive rights laws originate.)
Health equity—Parallel proposals from NYSCRF and the Tara Health Foundation asked about maternal and general health disparities based on race, prompting three withdrawals and just one vote (12.4 percent at Centene).
Pharmaceuticals—ICCR members had a new and very specific proposal about the drug patenting process; the highest vote was 31.1 percent at Merck. Two resubmitted proposals on Covid drug pricing earned about what they did in 2022—31 percent; votes were lower about Covid vaccine technology transfer.
Human rights: The surge in proposals seeking racial justice audits helped drive record volume in 2022 and a new campaign from raised additional concerns in 2023 about domestic compliance with international labor standards. Other perennial human rights questions continued about operations in troubled parts of the world, too. There were 92 proposals in all, about the same as in 2022, with 63 votes, 24 withdrawals and five omissions. Support dropped 10 points to just under 20 percent, the lowest in five years. Withdrawals on human rights remain less common than on many other topics.
Racial Justice—Half of two dozen proposals seeking civil rights or racial justice audits about differential impacts on employees and customers were resubmissions that earned in almost every case significant support in 2022 and five of these were withdrawn in 2023, along with seven more. Votes in 2023 were lower, though, with the highest at American Water Works (40 percent) and the prison company GEO Group (40.3 percent). Eleven companies agreed to conduct the requested audits, prompting withdrawals, including Alphabet and Elevance Health, which will assess health equity and race.
Two companies—AT&T and Walmart—failed in their SEC challenges which argued anti-racial justice audit proposals from 2022 with extremley low votes disqualified pro-racial justice audit resolutions in 2023—showing that the SEC continued to differentiate between anti-ESG proposals that appear to propose one thing and then argue against it elsewhere in the proposal.
Organizing rights—The biggest new development for human and labor rights was a push sparked by the current ferment about domestic trade union organizing. New proposals filed mostly by the New York City and State Comptrollers asked for reports or new commitments to organizing rights. Out of 15 filings, nine went to votes, five were withdrawn and one was omitted for procedural reasons. Votes included a majority of 52 percent at Starbucks, which remains under widespread scrutiny for anti-union behavior. Votes were mostly in the 30-percent decile. A notable agreement came early in the year when Apple said it would assess allegations of union busting at its retail stores. Three other withdrawals came after companies agreed to act, as well.
Risky business—Thirty resolutions voiced longstanding requests for assessments of human rights policies and risks. Nine resubmitted proposals addressed military products, targeted social media ads, Indigenous peoples and child and forced labor in supply chains. Conflict zone operations proposals had a new twist, with proposals about how and why U.S. semiconductor parts have been found in weapons Russia used in the Ukraine war; the vote at Texas Instruments was 23 percent. Other votes were largely modest, with the highest at General Dynamics for a proposal about assessing the human rights of its military weapons (25.1 percent). There were seven about military and personal weapons and the highest vote among these was 26.5 percent for reporting on gun marketing risks at Sturm, Ruger.
Media and technology—A dozen proposals continued to ask about the vexing problems of divisive content on digital platforms, including the algorithms responsible for shaping personal experience and the challenges of online safety. Proponents again asked about protecting digital privacy and collaborating with repressive governments, and the highest scoring proposals reiterated longstanding concerns about surveillance technology in two different proposals on the subject at Amazon.com that earned 34.2 percent and 37.5 percent.
Sustainable Governance
Improvements in board diversity and ubiquitous sustainability reporting mean proposals on these subjects are waning. Twenty-one proposals in 2023 asked about board diversity and specific types of oversight and 22 more were about sustainability approaches in corporate governance. There were 28 votes, 14 withdrawals and just one omission.
Board diversity and oversight: The New York City Comptroller’s Office continued its Boardroom Accountability Project and asked for reporting in the proxy statement in a matrix format about nominee qualifications. There were eight withdrawals after agreements and two high votes—44.1 percent at Capital One Financial and 48.9 percent at NextEra Energy. Otherwise, the highest votes among six resolutions about different types of board oversight came on at Berkshire Hathaway (18 percent regarding climate change) and at HCA Healthcare (18.9 percent on healthcare facility staffing levels).
ESG pay links: Nine proposals asked companies to report on or consider ESG pay links in compensation arrangements, reprising earlier proposals at a new recipients. The highest vote was a notable 53 percent at Rite Aid.
Investment practices: As You Sow pressed ahead with its idea that corporate employee retirement plans should include options for climate-friendly investing, but the idea has gained little traction with investors; there were six votes all less than 9 percent.
Metrics: Five proposals raised various questions about sustainability policies and adherence to them, with just two votes in the midteens.
Anti-ESG
Despite much press attention to an expanded slate of proposals opposed to social and environmental action by companies, investors shrugged off these ideas, giving 53 proposals that went to votes average support of only 2.5 percent—half what a proposal must earn to qualify for resubmission. While much of the funding for anti-ESG proposals comes from right-wing champions of the oil and gas sector and their allies on the political right, the 2023 proxy season proposals focused almost exclusively on culture war social policy matters. Proposals inveighed against diversity programs, claimed various business partnerships violate fiduciary duty and alleged the U.S. government has censored their views. In 2023 and again in 2024 they have taken to the courts to try to eliminate the shareholder proposal process completely.