Voting on ESG: A Gap Becomes a Gulf
Key Observations U.S. support for E&S proposals fell further in 2024. U.S. managers further reduced their backing for environmental and social (E&S) proposals in the 2024 proxy year. Average support by 20 large U.S. firms for significant E&S shareholder resolutions funds fell to 31% in 2024 from a 2021 peak of 54%. For the first […]
Posted by Lindsey Stewart, Morningstar, Inc., on Wednesday, February 12, 2025
Editor's Note:
Lindsey Stewart is Director of Investment Stewardship Research at Morningstar, Inc. This post is based on a Morningstar memorandum by Mr. Stewart, River Meng, and Quinn Rennell.
Key Observations
U.S. support for E&S proposals fell further in 2024.
- U.S. managers further reduced their backing for environmental and social (E&S) proposals in the 2024 proxy year. Average support by 20 large U.S. firms for significant E&S shareholder resolutions funds fell to 31% in 2024 from a 2021 peak of 54%.
- For the first time in the last five proxy years, U.S. firms’ support for environmental resolutions fell below that for social resolutions, against the backdrop of growing political scrutiny of asset managers’ net zero aspirations.
Stable support by European and U.S. sustainable funds.
- In contrast to the U.S., votes by 15 European firms for the same resolutions was consistently very high, averaging 96% over the last five proxy years.
- Support for these resolutions by 308 U.S. sustainable funds was substantially higher than the 20 U.S. firms’ average. The funds averaged 68% support over five years, peaking at 77% in 2021.
- Unlike the U.S. firms’ average, which fell, average support by sustainable funds was stable in 2024 compared with 2023, at just over 60%.
More U.S. firms decided to cut support in 2024.
- For the second year in a row, most of the 20 U.S. firms we assessed showed a declining trend in support in the 2024 proxy year.
- Columbia Threadneedle, Invesco and State Street substantially cut their support for significant E&S resolutions for the first time in 2024.
- Several other U.S. firms – including BlackRock, J.P. Morgan and Vanguard – cut their support further in 2024 having reduced their support already in 2023.
