An Analysis of ESG Shareholder Resolutions in Australia

This article describes and analyses the recent significant increase in Australia of resolutions proposed by shareholders focused on environmental, social and governance (‘ESG’) issues. The research is placed in the context of the legal framework in which shareholder resolutions are advanced. Two sources of data are used for the analysis. First, information about shareholder ESG resolutions proposed in listed Australian companies between 2002 and 2019 was obtained. Second, interviews were conducted with representatives of the proponents of ESG resolutions, institutional shareholders, company directors, governance professionals, and the Australian Securities and Investments Commission. The analysis finds that ESG shareholder resolutions have increased in number, prominence and impact. There has been a significant increase in shareholder ESG resolutions in the last three years, particularly resolutions focused on climate change, albeit that this increase has been concentrated in a small number of companies and industries, with the source of this activism - the filers of the resolutions - being even more concentrated. Against a background of modest average levels of support for shareholder ESG resolutions, the atypical cases of those companies which have recorded high levels of support is notable. The research finds that shareholder ESG resolutions are generally recognised as a valuable corporate stakeholder engagement mechanism and one that has resulted in positive change in some of the companies which have been the subject of those resolutions