Shareholders Vote Against Key ESG Proposals
June 6, 2024
Shareholders at both McDonald’s and Exxon Mobil have voted against key ESG-related proposals at recent annual general meetings, despite prominent campaigns by institutional investors.
A resolution aimed at curbing the use of antibiotics in its meat production failed to pass at McDonald’s AGM on May 24, with only 15% of shareholders voting in favour.
The resolution called for McDonald’s to adopt a policy phasing out the use of antibiotics in its beef and pork. McDonald’s is one of the largest purchasers of meat in the world and relies on antibiotics to prevent and treat bacterial infections in livestock.
The process has been linked to antibiotic resistance, which is recognised as a global health crisis by the World Health Organization and the US Centers for Disease Control and Prevention.
Institutional investors had vocally backed the McDonald’s proposal, with LGIM and Schroders expressing support, while a survey from PensionBee conducted shortly before the vote found nearly three-quarters (74%) of pension savers supported the resolution.
Despite these concerns, support for the resolution had declined since last year, when a similar resolution was proposed and achieved 17% approval.
Just a few days after McDonald’s AGM, Exxon Mobil’s shareholders also voted overwhelmingly in line with the board’s recommendations, rejecting several ESG-related proposals.
Major institutional investors like CalPERS, the largest public pension fund in the US, had urged shareholders to vote against all Exxon directors, criticising the company’s lawsuit against climate activist shareholders.
But on June 29, Exxon’s board was re-elected with an average of 95% support. Notably, 98% of shareholders also voted against a proposal to revisit executive pay incentives for greenhouse gas emission reductions, and large majorities also voted down proposals for reports on social impact (92%), gender and race pay gaps (80%) and plastic production (79%).
The votes highlighted the ongoing challenge of aligning shareholder actions with ESG action, even as institutional investors continue to push for stronger sustainability practices.
Last Updated: 10 June 2024