Shareholder Interest in Triple Bottom Line ‘Increasing’

Investor attention to the “triple bottom line” of environmental, social and economic performance is growing and raising support levels for shareholder resolutions on environmental and social issues, according to a report by Ernst & Young.

Leading corporate sustainability issues in the 2012 proxy season: is your board prepared? says that environmental and social proposals will lead all other major proposal categories this year, in terms of shareholder resolutions on proxy ballots.

These proposals accounted for 40 percent of all shareholder resolutions in 2011, up from 30 percent in 2010. The proposals also broke new ground by averaging support from 21 percent of votes cast, up from 18 percent in 2010, the report says.

The number and types of shareholder resolutions reaching proxy ballots is only a limited measure of investors’ increasing engagement efforts, however. A significant portion of submitted proposals are withdrawn and never voted on due to the success of company-shareholder engagement efforts as the two sides reach agreement. Companies are increasingly willing to enter into substantive dialogue with investors and other stakeholders and to take action, including by enhancing disclosure around key issues, the report says.

The E&Y report echos findings released in February by environmental and investment coalition Ceres on shareholder activism in the energy sector. Ceres said that shareholders filed 66 climate and energy resolutions with 41 coal, electric and oil companies in the 2011 proxy season, making it the busiest yet for such resolutions in the sector.