Efforts to advance corporate progress on environmental, social and governance (ESG) matters continued to gather momentum and generate the biggest headlines in the 2021 proxy season. These efforts were bolstered by constructive company-investor engagements, record levels of support for environmental and social shareholder proposals, governmental actions on climate and social-related matters, and regulatory developments on ESG reporting.
Investors are growing more urgent in their demands that companies address ESG risks and opportunities — and demonstrating more willingness to use their votes to accelerate progress. Companies are responding. This year saw a significant uptick in companies using their proxy statements to clarify how environmental and social matters are addressed and highlight new climate ambitions and commitments related to diversity, equity and inclusion. More companies are also aligning executive pay with ESG objectives.
These developments reflect increasing conviction among companies and their stakeholders that integrating ESG into strategy, risk management, human capital initiatives and governance – and communicating ESG performance – is a business imperative.
To help boards keep pace with evolving investor and regulatory expectations and ESG disclosures in proxies, this report examines five ESG developments from the 2021 season and offers key takeaways and questions for boards to consider.
To read EY’s full report on ESG developments in the 2021 proxy season, click here.