Minerva shareholder proposals annual review finds falling support for proposals

November 24th, 2023

2023 had the highest number of shareholder proposals, but support for proposals fell in each category other than governance, according to the latest Minerva Shareholder Proposals Annual Review.

The review, due to be published in February 2024 which explores global trends in shareholder activity, found that overall, votes in favour by category reduced by a significant margin from 2022 to 2023.

The average support for environmental proposals fell by 3.90%, social proposals fell by 6.02%, governance rose by 0.01% and remuneration average support fell by 7.83%.

It identified regional differences in the number of proposals, with significant increases in the number of proposals faced by Japanese companies in 2023.

However, the US led in terms of number of proposals with 565 proposals in 2023, compared with just 25 in the UK and 48 for European companies.

This is due to different filling rules and different standards of governance and disclosure in the US.

The annual review examined shareholder proposals across Australia, Canada, Europe, Japan, the UK and the US.

The review found a significant increase in shareholder proposals in Japan, where there were 189 shareholder proposals in 2023, compared to 119 in 2022.

Across all regions, most shareholder proposals were governance-related, much like the previous year, although there were some differences in individual markets.

For example, in Canada, environment-related proposals were dominant representing 50% of the total, up from 23% in 2022. In 2022, governance-related proposals had represented 46% of the total, but this fell to just 15% this year.

In the US, there was an increase in anti-ESG proposals with 49 in 2023 compared to 24 in 2022. However, none of the anti-ESG proposals received over 10% of votes in favour, suggesting the proposals are not valued by shareholders.

Proposals on bank financing of fossil fuels was a common theme across markets, although these proposals did not receive high levels of support.

There were significant roadblocks to gathering data on proponent groups, particularly in Japan, where companies failed to disclose the shareholder behind a resolution 93% of the time.

The number of shareholder proposals increased across all proponent groups from 2022 to 2023, led by activist investors.

Religious institutions and trade unions both increased their activity in 2023 versus 2022, suggesting these groups could become more prominent in the coming years.