Lindsey Stewart is Director of Investment Stewardship Research at Morningstar, Inc. This post is based on a Morningstar memorandum by Mr. Stewart and River Meng.
Key Observations
- Average support for ESG-focused shareholder resolutions in the US stabilized at 23% in the 2024 proxy year, after a steep decline in 2023. Excluding a growing cohort of resolutions by anti-ESG filers, the 2024 average is 27% (2023: 26%).
- Support for governance resolutions rebounded in 2024 to 36% from a low of 30% in 2023 (excl. anti-ESG filers), amid a growing focus on shareholder rights.
- Over the same period, support for environmental and social resolutions fell further to 19% from 22% (excl. anti-ESG filers). The declining trend slowed in 2024.
- The number of well-backed key resolutions hit a five-year low in 2024: just 37 – down from a peak of 103 in 2022. Key resolutions are those backed by at least 40% of a company’s independent shareholders.
- This contraction is driven by large asset managers’ votes, as they increasingly question the merit of many environmental and social (E&S) proposals.
- By extending our analysis to proposals with at least 30% adjusted support, we see greater stability, even growth, among bronze-tier resolutions that are more consistently backed by other asset managers.
- The two largest managers, BlackRock and Vanguard, further cut their support for E&S proposals, seeing many as “prescriptive,” “redundant,” or “not material.”
- State Street – third of the Big Three index fund managers – significantly reduced its E&S support in 2024, breaking the firm’s prior moderate-but-stable support trend. The firm has so far not reported on this.
- Managers with a pro-ESG voting history did not mimic the steep decline in support by the Big Three. There was a slight drop in the average of four managers we reviewed, but their support remained high overall.
