Investor interests influence disclosure trends.

Author:Heffes, Ellen M.
Position:CORPORATE GOVERNANCE
 
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A review of shareholder-sponsored proposals reveals long-standing proponents of environmental and social (E+S) topics continue to influence how companies address corporate sustainability. While some companies undertake these initiatives on their own, in many cases, investors are helping to frame the dialogue and drive change.

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As of early April, E+S proposals account for approximately 45 percent of all shareholder proposals submitted thus far in 2013.

A new report by Ernst & Young LLP, How Today's Investors are Framing Conversations on Corporate Sustainability, shows attention to E+S topics particularly from institutional investors is influencing corporate sustainability disclosure trends.

Three topics comprise nearly 60 percent of E+S shareholder proposals in 2013: political spending and lobbying; climate change and sustainability; and board and corporate diversity.

The report highlights that though some E+S proposals do not make it to the proxy ballot box, their impact is noticeable, if not stronger due to the fact that most decisions to withdraw are a result of substantive dialogue with a company or action has been taken. A high rate of withdrawals has already been seen among the top three E+S proposal topics:

* Political Spending & Lobbying: About 17 percent of proposals have been withdrawn as companies have agreed to the disclosure and oversight provisions requested;

* Climate Change & Sustainability: Nearly one-third of proposals have been withdrawn, mostly due to agreements to provide a comprehensive sustainability report or to report on specific metrics; and

* Board & Corporate Diversity: About one-third of proposals have been...

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