• Atmospheric CO2 /Parts per Million /Annual Averages /Data Source: noaa.gov

  • 1980338.91ppm

  • 1981340.11ppm

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  • 1984344.07ppm

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  • 1986346.97ppm

  • 1987348.68ppm

  • 1988351.16ppm

  • 1989352.78ppm

  • 1990354.05ppm

  • 1991355.39ppm

  • 1992356.1ppm

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  • 1994358.33ppm

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  • 1996361.93ppm

  • 1997363.04ppm

  • 1998365.7ppm

  • 1999367.8ppm

  • 2000368.97ppm

  • 2001370.57ppm

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  • 2004376.96ppm

  • 2005378.97ppm

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  • 2007382.9ppm

  • 2008385.01ppm

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  • 2010388.76ppm

  • 2011390.63ppm

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  • 2016403.09ppm

  • 2017405.22ppm

  • 2018407.62ppm

  • 2019410.07ppm

  • 2020412.44ppm

  • 2021414.72ppm

  • 2022418.56ppm

  • 2023421.08ppm

News & Views

Conflicts and noise threaten to overshadow upcoming AGM season

Shareholder disagreements and an anti-ESG backlash will make for a messy AGM season this year

Content Tags: Pensions  Interview  ESG  Activism  Stewardship  US  UK 

In recent years, institutional investors have used their influence to promote better ESG practices, with the aim of enhancing company performance while they prepare for the sustainability challenges of the future. 

However, there has recently been a growing sentiment against efforts to improve the environmental, social and governance (ESG) characteristics of companies, particularly regarding their preparedness for climate change and on social topics such as diversity and inclusion.

In the US, for example, two different trends have emerged.

On the one hand, some want to set stricter expectations on sustainability. On the other, anti-ESG groups claim that sustainability integration is a luxury that companies cannot afford at a time of macroeconomic strife, and that ESG is add odds with investors duty to aim all focus on investment returns.

“In the 2022 AGM season, we saw the start of a change in sentiment which we believe will become more apparent in the 2023 season,” said Michiel van Esch, corporate governance specialist and head of voting at Dutch asset manager Robeco. 

“An increasing amount of shareholder proposals are being filed with the aim of countering ESG measures. These proposals never directly ask companies to worsen their ESG performance, but rather aim to discard its financial relevance," Van Esch added.

Long-term perspective

ESG in the end is about taking a long-term perspective that helps portfolio companies to prepare for the future, Van Esch continued, something that if done well will be in the best interest of clients and other stakeholders.

“Often, the phrasing in these resolutions suggests their objective is to request standard governance improvements, but the supporting public statements provided by the proponent reveals that the true objective is to frustrate the companies' ESG efforts,” he explained. 

“Discerning the true objective of these proposals therefore comes with unique challenges and requires an in-depth analysis spanning well beyond companies’ proxy statements and annual reports.”

Van Esch reveals that each shareholder proposal at Robeco is assessed on a case-by-case basis and supports resolutions that aim to increase transparency on material ESG issues, enhance long-term shareholder value creation, address material ESG risks and enforce appropriate conduct.”

“In most cases, we will oppose resolutions that are used to support an anti-ESG narrative," Van Esch said.

Climate voting

The need to address climate change has raised the bar in the activism shown by investors who several years ago would merely ‘rubber stamp’ management decisions. 

Now, how a company is moving to reduce its carbon footprint, for example by cutting emissions, has risen to the top of AGM agendas – sometimes put there by the managements themselves.


A few years ago, shareholder proposals were the only item on the agenda that sought to address global warming.

Michiel van Esch

“However, over the last two years, companies have started to put their own strategies up for a vote, gauging how shareholders view the company's approach to the climate transition," Van Esch added.

“Additionally, shareholders have started voting against director nominations or other agenda items if companies fail to make sufficient progress on climate change," he continued. 

"Until last year, shareholder proposals asking for improved climate change action were gaining increased support."

In 2022 however, support levels stabilized or even dropped, "probably triggered by the energy crisis sparked by the conflict in Ukraine," Van Esch said.

Societal pushback

The decreasing support is likely to manifest itself in lower support for ‘Say on Climate’ proposals.

“For the coming AGM season, it is likely that shareholder proposals will gain slightly less support, because climate advocacy is receiving a higher degree of societal pushback,” Van Esch said.

“Likewise, the ‘Say on Climate’ proposals are likely to gain lower support rates, as the usual ESG-minded supporters of such resolutions will be setting more stringent standards to the quality of transition plans in order to support them.”

Van Esch stressed that "it will be difficult for management to read the results from AGMs with such conflicting trends. Hence, ongoing shareholder consultation and dialogue before and after the meetings will remain key to understanding what the shareholder base actually expects from management.”

Protecting biodiversity

Van Esch said his Active Ownership team will similarly take a tough line with companies that are not sufficiently aligned with the goals of the Climate Action 100+ investor collaboration, the Transition Pathway Initiative, Robeco’s own climate change framework.

“Our assessment of how well they are aligned will inform a vote against director nominations, or the accounts and reports, to stress the urgency of the topic,” he noted.

“And starting in 2023, we will gradually phase in a similar approach to biodiversity, which is one of our other sustainability priorities, next to similar approaches for climate change and human rights.”

Challenging the overpaid

Another contentious topic is the old chestnut of executive pay that is not aligned to performance.

Both the US regulator, the SEC, and the EU’s Shareholder Reporting Directive (SRD2) have strengthened ‘Say on Pay’ disclosure rules for companies.


In recent years, Say on Pay proposals have gained much more attention.

Michiel van Esch

Increased focus on Say on Pay proposals was largely triggered by the recent crisis years in which many companies deviated from their pay plans, arguing that exceptional circumstances such as Covid were out of the control of management.

“Therefore, bonuses were often paid out, despite missing performance targets, or were cancelled completely when deemed inappropriate, given the negative experience of shareholders or other stakeholders," said Van Esch.

Tackling short termism

However, enforcing a strong link between key performance indicators and pay-outs only tackles part of the remuneration issue. 

“A significant problem with many pay policies is that they create a focus on achieving short-term spikes in performance rather than sustained performance over multiple years,” warned van Esch.

“This is because many long-term incentives use an aggregation of a three-year trailing average profits being paid out on an annual basis. Additionally, the pay of chief executives has increased much more quickly in recent years than average employee wages.”

He reveals that Robeco uses an assessment framework to judge whether executive pay packets are justified. 

Based on this framework, the company supports approximately 70% of remuneration reports and oppose 30%. 

Van Esch stressed that "the good news is that even though all of the attention usually is aimed at the problematic failures of Say on Pay votes, there are also many examples of remuneration committees that do a decent job.”

Equity grants from Covid

Finally, Van Esch said he will be keeping a close eye on equity awards issued after Covid began that will pay out this year. 

Many companies blame external factors for poor performance but then are happy to take credit if a different set of external factors boost earnings.

“This year will witness the vesting of a wave of equity grants awarded in 2020, a year in which many companies awarded executives a high number of shares to offset the share price dip triggered by the pandemic,” he said.

“In cases where the companies’ share price subsequently surged, shareholders are likely to carefully monitor whether remuneration committees exercised their discretion to adjust pay-outs in response. So, we expect Say on Pay proposals to remain in the spotlight during the 2023 voting season, and we’ll vote against any excessive awards," Van Esch noted.

“This was largely triggered by the recent crisis years in which many companies deviated from their pay plans, arguing that exceptional circumstances such as Covid were out of the control of management," he continued.

“Therefore, bonuses were often paid out, despite missing performance targets, or were cancelled completely when deemed inappropriate, given the negative experience of shareholders or other stakeholders," Van Esch concluded.

Content Tags: Pensions  Interview  ESG  Activism  Stewardship  US  UK 

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