Involvement highest among Gen Z
Companies should be held responsible for the damage they bring to the environment and society. That’s the call from the majority of U.S. retail investors.
However, a new study from activist investment platform Tulipshare shows that among 71% of polled retail investors advocating for damage control across businesses listed on US stock exchanges, only 40% have attended and truly voted at an AGM of a company in which they hold stock.
According to Antoine Argouges, CEO and founder of Tulipshare, “Most people, due to no fault of their own, do not know that every share has shareholder rights attached to it. When those shareholder rights are utilized in the correct way, they can be used to drive positive change in a company.
Only 47% of respondents to the poll indicated their provider had notified them that they were entitled to vote at an upcoming annual general meeting (AGM) of a firm. This suggests that conventional brokers and investing platforms need to do more to notify investors about their shareholder rights. Just 48% of investors who obtained the proper tools from their broker or investing platform reported receiving information matching what was on the ballot.
“Our survey found that only 38% of retail investors in the US find the current means of voting easily accessible. Once given the correct information and the necessary tools to exercise their shareholder rights are made available, retail investors - no matter the size of their investments - can help push for stronger environmental and social commitments and ensure the companies we invest our money in are being responsibly managed with leadership accounting for all material risks and opportunities,” he added.
Tulipshare's research also reveals that the US had steadily low turnout for AGMs across all age groups, with 18 to 24 year olds topping the list with a 52% turnout rate, followed by 25 to 34 year olds with 37%, 35 to 44 year olds with 33%, 45 to 54 year olds with 34%, and those over 55 with 41%. Just 31% of respondents who were asked if their votes will matter responded yes, 32% disagreed, and 34% were undecided.
The retail investors who participated most in the AGM (aged 18 to 24) thought their votes would have the most influence (50%) on the company.
Recently, corporate executives, government officials, and a variety of purportedly pro-business advocacy groups have expanded their rhetorical attacks, legislation, and legal actions against ESG investment as a whole. Institutional investors continue to wield enormous influence over whether proposals will be approved at an AGM of a firm, but many of them are voting down shareholder resolutions in favour of backing management choices.
This meant that just one out of every 75 proposals submitted would receive institutional funding in 2022.
“Despite growing interest around shareholder activism, the percentage of environmental and social proposals which pass is still considerably low. In order to generate real impact, we need all investors to use their money, take ownership of their investments and exercise their shareholder rights to create lasting, positive change - the change traditional brokers, asset managers and institutional investors are failing to prioritize.”
“It is naive for any investor, asset manager or financial institution to claim zero responsibility for the transition to a low-carbon economy or find duty in voting against proposals that would ensure basic human rights are met across some of the biggest supply chains in the world,” Argouges concluded.
