09 Mar 2022
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Nuveen’s 2022 Proxy Preview Cites ESG Accountability and Impact as Key Areas of Market Focus
Nuveen, the asset manager of TIAA, today released their 2022 Proxy Season Preview, which highlights the key market themes that will drive this year’s investor agenda. With a significant increase in ESG transparency over the last few years, the preview predicts investor engagements, shareholder proposals and proxy votes will be used to drive greater accountability and impact, reflecting enhanced expectations on climate-related issues in particular.
“In the maturing ESG landscape, investors increasingly recognize that reporting does not automatically generate impact, which in turn, is resulting in a greater focus on accountability as the bridge,” said Amy O’Brien, Global Head of Responsible Investing at Nuveen. “We expect this proxy season to place greater emphasis on corporate strategies and ultimate environmental and social objectives.”
Specifically, Nuveen’s proxy preview expects heightened attention to the following:
- Shareholders Will Move Past Transparency, Toward Accountability: Investors increasingly recognize that assessing company accountability is more likely to indicate which companies are making meaningful progress, and which companies are using transparency to deflect stakeholder pressure. For example, earlier versions of climate-related shareholder proposals were often broad-based and transparency focused, in contrast to the current proposals requesting specific greenhouse gas reduction targets or strategies to keep business operations aligned with net zero ambitions.
- Regulatory Changes Will Result in More Shareholder Proposals Making it to a Vote: Changes in the SEC’s position on the social policy significance of E&S issues will increase not only the quantity of shareholder proposals that appear on ballots, but also the specificity of what the proposal requests of the company.
- Director Elections Will be in the Spotlight: Investors continue to advocate for more accountability via independent board leadership and more climate expertise, in addition to target setting. The rise of net zero commitments from asset owners and asset managers suggests investors may be prepared to translate newly enhanced ESG transparency into investment decision-making, including voting against directors where companies are unresponsive or clearly misaligned with the investors’ strategies for achieving net zero.
“Stewardship has become an essential tool in the responsible investing toolkit ─ a way for shareholders to push for real change,” said Peter Reali, Global Head of Stewardship at Nuveen. “This proxy season will demonstrate a continued evolution in the depth and scope of those efforts as investors grapple with evaluating companies’ near-term practices against environmental and social impacts that may take years to materialize.”