Ceres, the US-based sustainability coalition, has published a guide to help global investors respond to the shareholder resolutions on environmental, social and governance (ESG) issues that are becoming more common at US listed companies.
It is publishing the guidance because it found that many institutional investors’ proxy voting guidelines were not detailed or comprehensive enough to guide voting on specific governance and sustainability issues.
The new Proxy Voting for Sustainability provides best practices and presents four sets of principles on governance, social issues, general sustainability and environmental performance to guide investors’ voting.
The 23-page document was written by Kirsten Snow Spalding, Ceres’ California Director and Jackie Cook, founder of proxy vote tracking project Fund Votes have a fiduciary responsibility to vote their proxies on these issues, but in too many instances it isn’t happening due to weak voting guidelines,” added Mindy Lubber, president of Ceres and director of the $10trn Investor Network on Climate Risk. The guidance comes as sustainability-related shareholder resolutions have proliferated in recent years. Average support for them has also been steadily increasing, reaching 20% this year.
Julie Fox Gorte, senior vice president for sustainable investing at PaxWorld Management, said: “Proxy voting is the sleeping giant of the investment world: an enormously powerful tool if used thoughtfully to shape corporate behavior, but one that most investors overlook.” The guide has the backing of major US pension funds such as CalPERS and CalSTRS.