Shareholders warm to proposals focused on climate, social issues: Georgeson

FILE PHOTO: The logo of Chevron (CVX) is seen in Los Angeles, California, United States, April 12, 2016. REUTERS/Lucy Nicholson/File Photo

BOSTON (Reuters) - In a year shaped by health and economic crises, investors increased support for shareholder proposals that back environmental and social causes, according to data that experts say indicates a trend that will likely intensify in 2021.

A majority of shareholders, including index funds BlackRock and Vanguard, supported 18 environmental and social-oriented shareholder proposals during the 2020 annual meeting season, more than double last year’s eight, shareholder services firm Georgeson and Proxy Insight said. In 2017, only five proposals gained support, the data showed.

At Chevron's CVX.N annual meeting, a proposal calling for reporting on climate lobbying aligned with Paris Agreement goals received 53.5% support, while at J.B. Hunt Transport Services JBHT.O, a proposal seeking information on how the company plans to reduce its contribution to climate change drew 54.3% support.

“Climate change and sustainability continues to be a focus for many investors but with a greater sense of pressure over reporting and accountability,” Hannah Orowitz, senior managing director at Georgeson, told Reuters.

At the same time, the report shows that shareholders appear more focused on better board oversight, having supported proposals for an independent chair this year at Baxter International and Boeing. The Boeing proposal received 52% support at a time when the company has been hurt by the grounding of its 737 MAX airliner after deadly crashes and suggests shareholders are concerned about the independent chair leading effectively.

In light of the coronavirus outbreak and a national focus on racism, experts say shareholders will likely press for more changes next year. “The pandemic and the renewed focus across society on racism will mean that next year’s shareholder proposal landscape may bring new kinds of proposals around social justice and anti-racism, as well as employee health and safety issues,” Orowitz said.

Reporting by Svea Herbst-Bayliss; Editing by Dan Grebler