Ernst & Young: Environmental and social topics lead shareholder proposal submissions

By Rob Starr, Content Manager, Big4.com

Engaging on environmental and social topics   a new report released by Ernst and Young, shows environmental and social proposals continued to lead all other categories in the 2012 proxy season, representing more than 40% of all shareholder proposals submitted. Linking executive compensation to sustainability metrics is one of the key topics discussed. Investor focus on this topic has largely been through behind the scenes engagement (only a handful of shareholder proposals were submitted and those that came to a vote received relatively low support). However, some companies are already taking the lead in this area by linking pay to metrics relating to energy efficiency, water usage and the reduction of carbon emissions.

However, managing the global supply chain was embedded in the ask of a significant number of shareholder proposals this year as was an interest in supply-chain related impacts.

Steve Starbuck, Leader Climate Change and Sustainability Services, Ernst & Young LLP commented:

“Investors focused on environmental and social issues have long used shareholder resolutions as a way of engaging companies on these topics,” he said. “Increasingly, we’re seeing companies use engagement to learn more about and respond to investor concerns in this area – and these discussions may result in better disclosure or changes to corporate policies and practices.”