Climate activists found companies more receptive to steps like cutting emissions or buying clean power this year, a new tally of shareholder resolutions shows, a trend proponents said undercuts the case for proxy rule changes sought by business groups.

Of the 145 climate-related proposals filed for this year’s springtime annual meeting season, 39 percent led to deals and were withdrawn, according to Ceres, a Boston-based advocacy group that coordinates and tracks the resolutions. Last year the rate was 36 percent, and 21 percent in 2015.

For instance restaurant parent Yum! Brands Inc in April agreed to track its emissions and to identify ways to reduce them, leading activists to withdraw a shareholder proposal before a shareholder vote, a company spokeswoman confirmed.

Executives are more inclined to compromise as extreme weather shows the impact of climate change, said Rob Berridge, Ceres’ director of shareholder engagement.

“The weather is worse, so the climate for these climate proposals is better. Companies are more receptive,” he said.

Along with climate resolutions, those focused on other areas like director nomination rules have also found traction, said John Roe, head of ISS Analytics, part of proxy adviser Institutional Shareholder Services.

ISS data shows among the roughly 820 resolutions of all types filed in each of the past three years, withdrawal rates were 23% in 2017, 31% in 2018 and 30% so far in 2019. ISS’ data does not capture how withdrawals were tied to deals. The counts by ISS and Ceres both include mainly U.S. companies.

Stephen Giove, partner at law firm Shearman & Sterling who represents large companies, said executives prefer to settle in private rather than confront shareholders at annual meetings, especially after high-profile wins for activists at several energy companies.

In several areas “There’s now more leverage on the side of the proponents,” Giove said.

The trends match how companies have responded to other criticisms, such how some banks have pulled back from private prisons and gunmakers.

The tallies will inform a debate over proposed rule changes sought by business groups like the U.S. Chamber of Commerce and the Business Roundtable to make proxy resolutions harder to file. Representatives for each group did not comment on Ceres’ tally.

A regulatory filing shows staff of the U.S. Securities and Exchange Commission could recommend rule changes next April.

Danielle Fugere, president of activist organization As You Sow, said rule changes are not needed. “Its become very clear that shareholders appropriately care about climate change,” she said.

Fugere cited resolutions by her group calling for grocer Kroger Co to report on renewable energy use, winning 25% investor support in 2017 and 31% in 2018. This year she said As You Sow made a deal with Kroger and withdrew the proposal.

Via e-mail, Kroger Group Vice President Jessica Adelman said the company spoke with As You Sow about cutting energy use and that it is getting ready to set a new carbon reduction commitment.

“We always engage with investors,” she said.

Topics USA Climate Change