LNW 2023 Shareholder Resolution Impact Report

Shareholder resolutions are an important way for investors in publicly traded companies to advocate for positive change, and we believe they offer our clients an additional way to meet their broader investment and impact objectives.

What exactly is a shareholder resolution? A proposal submitted by shareholders for a vote at the company’s annual meeting. While virtually all resolutions are non-binding (even ones that receive a majority vote), they are a way to capture media attention and put pressure on companies to deal constructively with a variety of issues related to their operations, ranging from executive compensation and labor relations, consumer packaging, petrochemical production and use, and water usage.

Eligible clients of LNW can support critical environmental, social and governance (ESG) resolutions drafted by shareholder advocacy experts. We notify all eligible clients of the opportunity they have to sign resolutions. Clients who participate are notified of the progress and results of the engagement, and their efforts are summarized annually in our Shareholder Resolution Impact Report.

Recent Trends

Over the past several years, there has been significant growth in the number of shareholder resolutions filed and more calls for concrete action from companies. In 2020 and 2021, it was perhaps sufficient for a company to agree to release data or prepare a report. But we now often see resolutions asking for companies to build on promises made and continue to make new commitments.

Perhaps as a result of more demands for action, we have begun to see something of a divergence between the opinions of the biggest managers like BlackRock and Vanguard and those of independent investors. BlackRock has called an increasing number of resolutions overly prescriptive and, in their opinion, “unlikely to promote long-term shareholder value.”1 However, this opinion does not seem to be shared by individual investors or all other major managers. While BlackRock and Vanguard have both steadily decreased the percentage of resolutions that they support since 2021, State Street, considered the third of the Big Three, has remained relatively steady across the three years. Individual investor support for resolutions has also remained relatively steady over the period.2 This does cause one to question the strength or genuineness of the commitments of some institutional investors despite what the public was led to believe over the past several years.

We remain committed to the power of shareholder advocacy to effect change while once again acknowledging that change can be slow. We thank our clients for lending their voices to this important work and look hopefully for positive outcomes in the future.

Spotlight on Two Resolutions

In our 2023 Shareholder Resolution Impact report we highlight two specific resolutions:

(1) MASTERCARD — The company agreed to annually reviewing its political engagement and lobbying expenditures and their alignment with its values and goals; the Company also agreed to supplement its expenditure disclosures for U.S. trade associations with a statement about the specific value to the company of participating in each association.

Background: Federal lobbying by industry groups and Political Action Committees (PACs) reached $4.1 billion in 2022, the highest level in over a decade.3 The majority of this lobbying isn’t done by companies directly, with mega-cap companies like Amazon and Meta the main exceptions, but by trade groups like the National Association of Realtors, PhRMA, and the American Hospital Association, and by broader business coalitions like the U.S. Chamber of Commerce and the Business Roundtable. The challenge for corporations often lies in the fact that while they may have a shared interest in a particular issue that leads them to support an organization, these organizations are often attempting to cater to a broad base with conflicting ideas and values outside of their one shared point of concern.

(2) CARMAX — The company agreed to provide additional information regarding its purchase and utilization of carbon offsets to meet its 2025 emissions reduction targets.

Background: While there are some reputable sources of carbon offsets providing both environmental and societal benefits, there is broad agreement amongst expert groups, including the Climate Action 100+ initiative, the United Nations and the Science Based Targets initiative, that carbon offsets should be used judiciously, particularly in situations where there are existing low or zero-carbon options and should ideally only be used to offset so-called “hard to abate” emissions that are the most difficult to reduce through more direct methods. In situations where using carbon offsets is appropriate, it is also important for companies to be clear about whether the offsets are intended to mitigate current emissions towards a carbon neutrality goal or to reach emissions reductions targets, and how they are verifying the quality and veracity of the offsets purchased in terms of additionality, permanence, and other metrics.

Read the full report here.


1 Morningstar. “Are There Too Many ESG Shareholder Proposals?” September 13, 2023. <https://www.morningstar.com/sustainable-investing/are-there-too-many-esg-shareholder-proposals>

2 ibid

3 Open Secrets. “Federal lobbying spending reaches $4.1 billion in 2022 — the highest since 2010.” January 26, 2023. < https://www.opensecrets.org/news/2023/01/federal-lobbying-spending-reaches-4-1-billion-in-2022-the-highest-since-2010/>