ESG | March 3, 2021

Principles for Responsible Investment will push signatories to vote their, uh, principles

Amy Cortese
ImpactAlpha Editor

Amy Cortese

ImpactAlpha, March 3 – The “voluntary and aspirational” PRI will beef up minimum standards for its 3,700 signatories. The move comes in the wake of a study that found that PRI signatories voted for ESG shareholder proposals less often than non-signatories.

“We know that some investors have joined the PRI, not out of any desire to incorporate sustainability into their investment practices, but to win mandates,” PRI’s Fiona Reynolds wrote in Responsible Investor.

The UN-backed group is “actively considering the inclusion of engagement and/or voting requirements” in the new standards, Reynolds said. Next month it will release “Making Voting Count,” to detail for signatories “how principle-based voting on shareholder resolutions can contribute to clear, effective and accountable stewardship.”

Also on tap: a new leadership team at PRI that will emphasize stewardship. PRI acknowledged the lackluster voting track record back in 2019, when it set out a vision for “active ownership 2.0.” 

Proxy preview

Principles for responsible Investment signatories and other investors will have ample opportunity to demonstrate their principles as the 2021 proxy season gets underway.

Members of the Interfaith Center on Corporate Responsibility have filed 244 shareholder resolutions at 152 companies this year, including resolutions addressing racial justice (64) and climate change (54). A fifth of the resolutions target issues arising from the Covid pandemic, such as vaccine access and pricing and paid sick leave for workers.

“Investor support for these proposals is critically important,” said Sanford Lewis of Shareholder Rights Group.

Climate Action 100+ investors have filed 37 shareholder proposals, including resolutions targeting climate lobbying at Exxon, General Motors and Philips66, net-zero ambitions at General Electric and climate-risk reporting at Berkshire Hathaway.