“Progressive” ESG Shareholder Activism: Quantitative Trends

“Progressive” ESG Shareholder Activism (full series)
Understanding ESG Activism | Quantitative Trends
Qualitative Trends | Pushing and Pushback

Quantitative Trends in ESG Resolutions

The recent numerical increase in ESG shareholder resolutions has been well-documented. A comprehensive review of the 2022 proxy season by Georgeson counted 941 shareholder resolutions submitted to Russell 3000 companies, 562 of which went to a vote. This was up significantly from 837 total filed in 2021 and 754 in 2020. As of mid-May, it had counted 951 ESG resolutions filed so far in the 2023 proxy season.

Archived Proxy Preview reports dating back to 2015 also illustrate this trend. The total number of resolutions profiled in each report (which uses a mid-February cutoff and thus does not capture resolutions filed later in the year) remained relatively stable at between 370 and 435 proposals filed annually from 2015 through 2021. Resolution counts thereafter increased markedly to 529 in 2022 and 542 in 2023—both all-time records.

Categorizing ESG resolutions is a rather subjective undertaking that can result in the same resolution being classified in different ways, but environmental resolutions were clearly one major driver of this recent growth. Georgeson calculated that such proposals grew by 46 percent from 2021 to 2022, with those that asked companies about greenhouse gas emission reduction targets being the most common type in both years. Similarly, the share of resolutions categorized in the Proxy Preview as related to climate change increased from 15 percent in 2021 (the third-largest category), to 21 percent in 2022 and 23 percent in 2023—making it the largest single topic in both years.

Of course, environmental proposals of all varieties have long been a major focus for ESG activists, and there are certain perennial targets. As of June 2023, the database maintained by the climate change–focused Ceres network contained 2,260 such resolutions dating back to 2009. It listed a total of 1,550 climate-related resolutions filed with hundreds of different companies since 2015, but 179 of these proposals were filed at just four corporations: Amazon, Chevron, Dominion Energy, and ExxonMobil. Just six proponents—As You Sow, the comptroller’s offices of New York State and New York City, and the ESG asset managers Green Century Capital Management, Trillium Asset Management, and Boston Trust Walden—filed over 43 percent of the climate-related shareholder resolutions listed in the Ceres database since 2015. As You Sow alone accounted for 274 of them.

ESG activist groups have themselves grown substantially over this same period. In its 2014–2015 fiscal year, Ceres reported total revenue of under $10.5 million, while its most recent tax filings for the 2020–2021 fiscal year disclosed almost $44.5 million in total revenue. Major funders of Ceres include the MacArthur Foundation ($15 million awarded from 2017 to 2023), the New Venture Fund (almost $7.3 million from 2017 to 2021), and the ClimateWorks Foundation (almost $4.4 million from 2018 to 2021). The Gordon E. and Betty I. Moore Foundation awarded Ceres three multi-year grants worth almost $9 million from 2016 to 2018. In June 2017 the Ceres investor network counted 133 members, while by June 2023 this had grown to 220.

As You Sow’s growth and expansion as a proponent of ESG shareholder resolutions has likewise been marked. The annual number of shareholder resolutions listed on its website grew from just eight in 2010 to over a hundred in 2023. From 2010 to 2021 (the most recent year for which information is available), As You Sow’s revenue also grew from about $1.27 million to almost $6 million, and it reported having raised over $12.7 million in 2020. Recently, some of its most important organizational funders have been the giant philanthropic foundations founded by liberal billionaire George Soros, whose Open Society Foundations and Foundation to Promote Open Society have combined to grant As You Sow at least $1.7 million since 2020.

While As You Sow has filed at least one shareholder resolution with approximately 270 different companies since 2010, just 24 of these accounted for more than one-third of the resolutions it submitted over that period. It filed 15 percent of its resolutions at a mere seven corporations: ExxonMobil, Chevron, Kroger, McDonald’s, Amazon, Ameren, and Southern Company. Since 2010, As You Sow has filed a combined 47 different shareholder resolutions with ExxonMobil and Chevron alone.

These are unsurprising corporate targets, given that until recently As You Sow focused primarily on environmental issues. Of the 683 resolutions that it filed from 2010 through mid-June 2023, it classified 296 (over 43 percent) under its energy program, 120 (about 17.5 percent) under its circular economy/waste program, and 77 (11 percent) under its environmental health program. While it has submitted 122 total resolutions under its social program (almost 18 percent), all of these have been filed since 2019. Social resolutions accounted for between 35 and 40 percent of all proposals submitted by As You Sow from 2021 through 2023, and the large majority of these were classified as relating to either “diversity and gender equality,” “racial justice, or “sexual and reproductive health.”

This tracks with larger observed ESG trends. The 2022 Proxy Preview noted that the number of “racial justice” proposals continued to grow significantly that year, having more than doubled from 2021 after being practically non-existent prior to that. This was largely a consequence of the 2020 Black Lives Matter protest movement. The Supreme Court’s 2022 decision in Dobbs v. Jackson Women’s Health Organization led to a spike in the number of resolutions related to abortion in 2023, which further illustrates just how closely ESG activism is linked to the country’s latest political debates. Indeed, corporate political activity itself has long been a major target for ESG shareholder activists, ranging from 17 to 26 percent of all resolutions profiled in the Proxy Preview each year from 2015 through 2023.

In the next installment, the nature of ESG shareholder resolutions has become progressively more radical, especially in recent years.