Shareholder resolutions are a key form of engagement for U.S. investors interested in changing the environmental and social impacts of companies. While much of this advocacy work has been done by large institutional investors (and many socially responsible investment firms) who directly own stock and have the right to vote their shares, there have been some recent efforts to attract retail investors to the ranks of shareholder advocates. A new initiative called YourStake.org that would allow such individual investors to weigh in on shareholder proposals, without actually voting their shares, was launched last year. Furthermore, the mutual fund rating firm Morningstar also has begun to provide ESG ratings for funds alongside its more traditional financial assessments, and in the last year acquired Fund Votes, a firm that has been assessing and reporting on the ways in which mutual funds vote on social and environmental shareholder proposals.
Director of Sustainable Stewardship Research, Morningstar
Global Head Of Sustainability Research, Morningstar
PROXY VOTE DATA Complements FUND RATINGS ON SUSTAINABILITY
Recent Morningstar research shows that the number and size of U.S. sustainability funds
continues to grow. Notable recent additions include sustainable exchange traded funds
(ETFs). Within this universe is a wide variation in strategies and commitment—from considering environmental, social and governance (ESG) alongside other factors, to integrating ESG in the investment process, to impact and green economy-focused funds.
Patrick Reed CEO And Co-Founder, Stake
Gabe Rissman President And Co-Founder, Stake
YOUR INVESTMENTS, YOUR VOICE – NEW TOOL FOR INDIVIDUAL SHAREHOLDER ADVOCACY
Imagine only 11 percent of people vote in an election. Imagine the perverse incentives that society would create. Now realize that, for the largest corporations that drive our economy, that is exactly what is happening.
While retail investors, everyday citizens, own roughly 70 percent of the wealth of public companies, fewer than 11 percent of retail accounts use their shareholder rights to vote proxies. Actual participation is even lower because most citizens invest through mutual funds, without direct access to their voting rights.