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It’s proxy season, the time of year when shareholders of public companies come together to vote on major initiatives, and apparently climate change is top of mind for investors.
A new study from sustainability nonprofit Ceres found that shareholders have filed 263 climate-related resolutions this year, a record number for a proxy season, and that the consumer goods sector saw the largest share, with more than 70 proposals.
- Of those, 28 proposals were in the consumer staples sector, and 45 were in the consumer discretionary category, which includes hotels, restaurants, and retailers.
Why are CPG companies seeing more proposals than sectors generally more associated with carbon emissions, such as energy and industry?
Rob Berridge, senior director of shareholder engagement at Ceres, told Retail Brew in an email that “the prevalence of climate-related proposals in consumer-oriented companies may be attributed to their substantial contribution to the North American economy.”
He added that these firms also face “significant reputational risks” related to climate change and environmental issues, and that there’s a “growing awareness about climate-related concerns across the spectrum of stakeholders, and their tangible impacts on issues like deforestation, plastic packaging, and energy use.”
The topics of these climate-related proposals run the gamut from greenhouse gas and biodiversity goals to political spending and lobbying.
Yet a rising number of proposals might not correspond with an increase in shareholder support for environmental and social proposals. Harvard Law School’s preview of the 2024 proxy season found that over the past eight months, the average level of support dropped to 14.6%, compared to 22.2% in the same period a year earlier.
The level of support for ESG initiatives as of February 15 was even lower, at 6.7%, though that encompasses just 18 proposals that had been voted on at that point. With a record number coming down the pike, as Ceres reported, that rate could shift significantly.
The law school also pointed out that many board members and shareholders are waiting for the SEC to finalize new rules on climate disclosure, which could shift the regulatory environment.