Proxy voting adds ESG leverage to retirement plans
A new Morningstar report presents proxy voting as a backdoor entry to ESG investing for retirement plan participants. As advocates pressure for simpler proxy voting procedures, retail investors could gain considerable leverage.
May 4, 2021
Increased attention on proxy voting could represent a backdoor into ESG investing for retirement plan participants.
With only 3% of 401(k) plans currently offering investments labeled as adhering to environmental, social and governance causes, most retail investors are unable to establish a footprint in the wildly popular sustainable investing space.
But, as investor advocates and regulators increase pressure for simpler and more transparent proxy voting procedures, it is possible retail investors could gain considerable leverage over the way fund companies currently vote on shareholder proposals.