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Sustainability Matters

Proxy Season Shows ESG Concerns on Shareholders’ Minds

Investors voted on 177 shareholder resolutions addressing sustainability issues.

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Active ownership is about shareholders exercising their right via the proxy process to address issues with company management that may affect shareholder value. If you own mutual funds, it is the funds that own the shares and therefore have the ability to exercise these rights, which include voting on management and shareholder resolutions at company annual meetings, the ability to propose shareholder resolutions, and the informal means to engage directly with management about issues of concern.

It is through active ownership that sustainable investors are helping companies understand and address environmental and social risks. Over the past 16 years, the level of overall shareholder support of these measures has increased from 12% to 29%. In addition, constructive dialogue has often resulted in companies coming to an agreement with shareholders about their concerns, which has led to many proposed shareholder resolutions being withdrawn prior to the annual meeting.

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Jon Hale does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.