Vanguard supported 2% of environmental and social (E&S) shareholder proposals at U.S. companies this proxy season, down from 12% in 2022, citing improvements in company disclosure rendering many proposals redundant.
The world’s second-largest fund manager revealed the drop in support in an August 28 regional brief, adding that the decrease in support is also in part due to the number of E&S proposal filings increasing from 290 in 2022 to 359 this year.
Vanguard also noted that new staff guidance released in late 2022 by the Securities and Exchange Commission (SEC) had made it harder for companies to keep shareholder proposals on matters like workforce diversity or climate off their ballots, and said that many proposals sought changes that might not be considered material.
“In some cases, we identified that although a proposal raised a material risk at the company in question, the board had already demonstrated appropriate oversight of the risk and evidenced its oversight through robust disclosure or had practices in place that substantially fulfilled the proposal’s request,” Vanguard said.
BlackRock also recently announced it had backed just 7% of the E&S shareholder proposals subject to a vote at U.S.-based portfolio companies during the 2023 proxy season, down from 22% in 2022.