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The most impactful environmental shareholder proposals in 2023

Which sectors were targeted, and what were the results? 💼 #ShareholderProposals #ResponsibleInvestment

 2023 Season

We have seen continuity in the use of shareholder proposals to promote changes in the way business is done, and to guide investor decision-making. This season, shareholders filed at least 542 resolutions on environmental, social and sustainable governance issues. This figure is set to equal or exceed last year's unprecedented final total of 627 resolutions.

 Key proposals for 2023

 We have identified some major trends this season:

 One of the most important trends of 2023 is the increase in proposals linked to climate change. The number of proposals specifically related to climate change has increased compared to last year, rising from 109 to 122 by mid-February 2022.

 These proposals mainly concern emissions, but also strategy and risk assessment in relation to climate change. Requirements for carbon-neutral targets are becoming increasingly detailed, and shareholders are turning their attention to small-cap companies.

 Some significant climate proposals this year include those addressed to ExxonMobil (fossil fuels), RBC (financial institution) and Lockheed Martin (small-cap company), calling for specific action on emissions, risk reduction strategies, and disclosure. The role of banks in the fight against climate change continues to be the focus of attention, particularly in Canada. In 2023, we also saw an increase in climate resolution in Japan, particularly with regard to the inclusion of climate targets and disclosure standards in their Articles of Association and by-laws.

Another important trend is farm animal welfare, which is back with a vengeance this year. The proposals call for improved living conditions for livestock destined for food production, as well as measures to prevent antibiotic resistance. McDonald's shareholders have asked the company to improve its disclosures on the measures it has put in place to improve poultry welfare and to bring its use of antibiotics into line with WHO guidelines.

Deforestation was also a major topic this season, with proposals calling on companies to report on the impact of their supply chain and implement impact reduction strategies. The resolutions filed received an average support rate of 20.7%. Among the targeted companies, we find Pilgrim's Pride and Kraft Heinz.

The most popular resolutions this year concern waste and pollution, particularly related to plastics and the circular economy.

We are also seeing an increase in anti-ESG proposals, aimed at encouraging investment in the oil and gas sector. These resolutions were not popular with investors, with an average approval rate of less than 4%.


Prognostics for 2024

The outlook for 2024 indicates a particular focus on three topics:

Plastics, due to the increased regulatory risk associated with the UN Plastic Pollution Treaty.

Biodiversity, with the finalization of the global framework for biodiversity following the COP 15 agreements.

Just transition, with an ever-increasing focus on environmental justice in regulations and standards.

In short, environmental shareholder proposals continue to have a significant impact on sustainable finance. Key trends for 2023 include climate change, livestock welfare, deforestation, waste, and pollution. For 2024, plastics, biodiversity, and the just transition are expected to remain key issues. #ShareholderProposals #ResponsibleInvestment