Tumelo's AGM Season Round-Up 2021

For many reasons, 2021 has been a proxy season like no other. AGMs have become battlegrounds for major global issues, like climate change and racial justice, with shareholder proposals earning more support from investors than we've ever seen. Proxy Preview reported that there have been 34 majority votes for ESG proposals in the USA so far this year, compared to last year's record of 21. A whopping 17 votes received more than 70% support, compared to only two last year. This season has even seen some of the world's biggest asset managers, including LGIM and BlackRock, supporting a wide range of ESG proposals. LGIM supported P&G's shareholders deforestation proposal in October, the first of its kind to ever pass at an AGM. One result of this is that some of the world's biggest polluters, like Exxon Mobil and Chevron, have finally had to face the music on their contributions to climate change.

The questions being asked are changing too, moving with the global zeitgeist. While old reliables, like political activity and environmental issues, remained popular across this year's proxy statements, the Covid-19 pandemic and the Black Lives Matter movement brought issues like worker safety and racial justice to the fore. These questions, and how they are answered, is critically important. BlackRock's annual policy review showed that 94% of ES shareholder proposals that received majority support were fully adopted, with partial or full adoption of two-thirds of ES proposals that received 30-50% support. This second statistic is particularly important because it shows that big wins in the boardroom don't always require a majority - a strong minority can force change all the same.

For Tumelo, this has been our first full AGM season. We launched with our first scheme, working in partnership with Legal & General, last June and have learned so much from listening to users ever since. The votes users have placed are being used to inform voting policies and decisions in some of the UK's biggest pension providers. From a representative sample of 11,000 users across 145 different votes, we were able to identify the most popular vote: plastic waste at major US retailer, Kroger. However, climate lobbying, pay inequality, and racial justice also featured close to the top. The graph below shows the relative popularity of each issue on our platform this season, with animal welfare issues coming out on top. The "other" category is primarily made up of health votes, which featured strongly this year, likely as a result of the pandemic. 

When users vote on our platform, they have the opportunity to tell their fund manager why they voted one way or the other. We have been delighted to see so many users engage with the comments feature, with almost 1000 comments sent to fund managers so far this season. These comments show us that underlying investors are engaging deeply with the questions and providing considered responses. They have been an effective way of convincing fund managers, even further, of the need to take underlying investor views seriously. It has also exposed the latent demand for connection between the everyday investor and the person stewarding their financial, as well as environmental and social, future. 

We are really excited to be part of this growing movement of shareholder empowerment. This year has given our company wings, demonstrating the potential value and opportunity of what we are aiming to achieve. We are partnering with organisations across the investment spectrum, from NGOs and activist groups to some of the world's biggest asset managers. If this year has taught us anything, it is that the systemic change we need requires action from all stakeholders. The US government is introducing a new rule which will increase the stock ownership requirements for raising questions at AGMs. This means big asset managers may need to become even more proactive if they want to represent their underlying investors on ESG issues. To keep the positive momentum of this AGM season going, we need to keep listening to investors, and making sure that their voices are heard. 

Our first AGM season has taught us so much about what our community of users cares about, and why. It has confirmed our intuition that people do care about how their money is invested and stewarded, and that they want to contribute to a more sustainable investment system. Since January, the number of votes on the Tumelo platform has increased by almost 250%. With all this momentum behind shareholder power, we are certain that this will only be the start. 

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