Better Performance Follows ESG Proposals

Shareholder resolutions addressing environmental and social issues were followed by improved corporate performance not only on sustainability matters but also– in cases where the proposal concerns a financially material issue–on the target’s market valuation over the long term, according to a recent Harvard Business School study. The number of proposals focusing on so-called ESG issues more than doubled in the past two decades but still about 58% of them focused on points deemed financially immaterial. Regardless of materiality though, and of the level of support the proposals garnered, the sustainability performance of the company on the targeted issue tends to improve.