Investors, ESG, and the board

November 2021

Environmental and social issues dominated the 2021 proxy season. Companies faced pressure from investors, employees, customers, and regulators to both enhance their environmental, social, and governance (ESG) practices and broadcast the results. On the environmental side, stakeholders upped their demands related to companies’ greenhouse gas emissions and climate transition plans. On the social side, shareholders overwhelmingly supported campaigns focused on increasing board and executive diversity and disclosing data aligned with the disclosure framework of the US Equal Employment Opportunity Commission’s EEO-1 data collection.

Faced with these trends and a prolonged pandemic, many boards are reviewing and enhancing their approach to ESG oversight. From October 4 to November 9, 2021, Tapestry Networks convened six virtual meetings at which the audit committee chairs of more than 100 large US public companies engaged with the following institutional investors:

  • Ben Colton, Global Co-Head of Asset Stewardship, State Street Global Advisors
  • Kristin Drake, Head of Investment Stewardship, Dimensional Fund Advisors
  • John Hoeppner, Head of US Stewardship and Sustainable Investments, Legal & General Investment Management America
  • Kellie Huennekens, ESG Stewardship Manager, Capital Group
  • Tanya Levy-Odom, Director, Investment Stewardship, BlackRock
  • Aeisha Mastagni, Portfolio Manager, CalSTRS
  • Michael McCauley, Senior Officer, State Board of Administration of Florida
  • Elizabeth Mooney, Accounting Analyst, Capital Group
  • Danielle Sugarman, Director, Investment Stewardship, BlackRock
  • Catherine Winner, Vice President, Global Head of Stewardship, Goldman Sachs

This ViewPoints synthesizes discussions about three key topics that emerged in the meetings:

  • Environmental and social practices are long-term value propositions
  • Investors want companies to share more of their ESG stories
  • Board oversight of ESG is emerging in real time