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2021 proxy season will focus on company behavior not just disclosure

Nuveen, the global investment manager of TIAA, today highlights the key shareholder proposal themes that will drive the corporate agenda this year by releasing its 2021 Proxy Season Preview. Building on trends seen in prior years, the increased attention to ESG from shareholders, stakeholders, and regulators sets up 2021 as a year of record support for shareholder proposals, potentially increasing votes against boards that are not keeping pace with ESG transparency and accountability. Nuveen anticipates more willingness from mainstream investors to use their votes to convey a stance on central ESG issues such as climate change and diversity & inclusion.

“The rise in popularity of ESG funds and increased focus on how companies are treating stakeholders is a barometer for how deeply invested shareholders are in the impact that companies are having on society, their employees and the environment,” said Amy O’Brien, Global Head of Responsible Investing at Nuveen. “Investor expectations for material ESG impact continues to ascend while the market aligns on standardization. There is an inextricable link between stewardship and responsible investing that will only strengthen.”

Specifically, Nuveen expects heightened attention on the following areas.

  1. Climate related proposals will focus on accountability and outcome. While many companies acknowledge climate risk and are making commitments, there is still a need for robust disclosure. Now, investors also expect accountability for their performance toward a low-carbon transition. Another possible reason for the expanded scope of climate-related proposals could be the SEC’s recent precedents on no-action requests have limited the ability to get traditional climate proposals to a vote. 2021 could become a watershed year for environmental proposals receiving majority support.
  2. Diversity and inclusion proposals will move beyond gender. Diversity and inclusion is now the most common human capital management issue addressed in proxy statements, both when it comes to boards and, more recently, in terms of the broader workforce. What is new for board diversity in 2021 is an increased focus on race/ethnicity. While less than 10% of boards in the Russell 3000- and none in the S&P 500- lack gender diversity, nearly 40% of the Russell 3000 lack apparent racial/ethnic diversity. Racial equity from a supplier, customer and community perspective will also draw attention through proposals requesting accountability in business practices.
  3. Companies will be held accountable for their response to COVID-19. Some of the biggest news drivers from 2020 have made their way to 2021 proxy season. Amidst shareholder calls for corporate accountability for paid sick leave and other health and safety policies for employees, and in some cases, for employees to be represented on boards, the essential worker has become a more cohesive and high profile stakeholder group.
  4. Political activities and executive compensation will be scrutinized. Shareholder proposals on political activities have been the most-voted proposal of each of the past two years, gaining increasing investor support. Recent political unrest adds to this trend, with investors keen to see whether companies maintain announced changes to policies on direct political contributions. Additionally, shareholder proponents are requesting that ESG factors be integrated into executive compensation design in order to create accountability for executing on ESG commitments.

“Proxy voting is shareholders’ primary means of communicating views to companies and demonstrating conviction on how an investors’ values align with corporate practices. This year’s proxy season is representative of the key issues that dominated social media engagement and news headlines in 2020 and the start of this year,” said Peter Reali, Nuveen’s Head of Engagement. “Companies who are able to demonstrate that they are making long-term, positive changes related to climate change, diversity, and employee health benefits will prove their long-term sustainability to investors.”

Nuveen’s 2021 Proxy Season Preview is available here. For more information about Nuveen’s approach to responsible investing, please visit

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