Shareholder Proposals - A Dulling Weapon?

In recent years, shareholders have increasingly challenged executives by filing ESG-related proposals. However, in the United States, political pressure is causing a shift in this trend. Meanwhile, France remains entangled in legal uncertainties, complicating the process. 23 May 2024 Shareholder Proposals - A Dulling Weapon?

Séverine Leboucher of Option Finance recently penned an article that referred SquareWell’s latest study – What Do Shareholders Propose?

In recent years, shareholders have increasingly filed ESG-related proposals to directly challenge executives. However, political pressures in the U.S. have led to a decline in support for such resolutions, dropping from 29% to 22% in just one year. Anti-ESG proposals have surged by over 60%. In France, legal uncertainties complicate the filing process, pushing investors to court. Recent legal battles with companies like ExxonMobil and TotalEnergies highlight the friction between corporations and activist investors on environmental and social issues.

SquareWell Partners’ Partner Louis Barbier commented on this trend, noting, “The decline in support for ESG proposals reflects a complex interplay of political and regulatory factors, which can undermine the effectiveness of shareholder activism in driving corporate change.”

This shift presents a significant challenge for investors advocating for sustainability and corporate responsibility. It underscores the need for more robust legal frameworks and shareholder engagement strategies to ensure that ESG considerations remain a priority in corporate governance.

The full article can be accessed here (In French, subscription required).


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