Proxy Impact provides environmental, social and sustainable (ESG) proxy voting services on domestic and foreign companies trading in the U.S. We do all the voting for you following our ESG guidelines. Voting is done via an online voting platform and confirmation of all votes is provided.
Environmental, social and governance criteria are a set of standards that sustainable and socially responsible investors use to evaluate companies. More and more investors are incorporating ESG considerations into their decision making as they recognize that a company’s environmental footprint, its relationship with its workers and community, and management’s structure and transparency all have a profound impact that reaches far beyond its bottom line.
Other proxy advisory services may provide ESG vote guidelines for clients at an additional charge, yet the vast majority of their clients do not subscribe to this. We believe ESG standards should be the starting point for corporate practices and not the exception to the rule.
Introduction to Proxy Voting
Proxy voting is the one time of the year that shareowners officially have a say in how their company is managed. Shareowners are asked to vote on core governance issues such as board of director elections, executive compensation, and auditor ratification, or on special events such as mergers or stock splits. Shareowners may submit resolutions (also called proposals) for a vote and there are several hundred resolutions filed every year on a wide variety of environmental, social and governance (ESG) issues.
These resolutions are particularly important for sustainable and impact investors as many are directly related to their core issues or organizational mission. Yet shareholders who rely on financial managers or custodians to vote their proxies often vote against ESG issues.
In 2020, more than 430 proposals were filed on social and environmental issues. The majority of these focused on fighting climate change, disclosing corporate political activity, and supporting women and diversity. If you did not give your financial manager or custodian explicit instructions to vote for these proposals than chances are that you voted against them.
Having a voting policy allows investors to leverage more of their assets in support of their values.
Governance issues account for most proxy votes as nearly every ballot includes board of director elections and a non-binding vote on executive compensation. Shareowners tend to support management (or simply don’t vote) as long as the stock price has not dropped significantly. But a proxy is not about how the stock is doing at a given moment in time, a proxy vote is to ensure that your company is well managed and in a position to protect long-term shareholder value.
Governance experts regularly raise concerns over those issues most often voted on such as excessive executive compensation, golden parachutes, insular boards, lack of board diversity, and auditor conflict of interest.
Additionally, a corporation’s role goes far beyond how much it pays its CEO or the return for its investors. It has a tremendous impact on the lives of its employees and for workers all along its supply chain. It may be a contributor to climate change or pioneering a clean energy economy. Does it support its community and pay its fair share of taxes – or does it pollute the local air and water and make political contributions that result in taxpayers subsidizing it cleanup costs.
As a shareowner you have a choice in what kind of company and world you want to invest in.
Proxy voting is an easy way to help align your investments with your values.