Shareholder Activism in the ESG Space: An Analysis of the Composition, Success Rates, and ESG Score Relationship of Shareholder Proposals from 2013-2020

This paper examines shareholder proposals provided by Institutional Shareholder Services from 2013 to 2020. It analyzes (1) the breakdown between SRI-related and governance related shareholder proposals over time and across industries, (2) trends in passage rates of SRI-related proposals over time and across industries, and (3) the relationship between passage rates of shareholder proposals and the ESG scores of the target firms. Using a simple linear regression, we find that (1) SRI-related proposal passage rates are on average 9.78% less than their non-SRI counterparts, when controlling for year fixed effects, (2) the average increase in passage rates of SRI-related proposals per year is 0.4%, (3) target companies whose proposals are passed by their shareholders have significantly poorer ESG-performance than target companies whose proposals did not pass, and this effect is augmented when looking specifically at SRI-related proposals.