The present and the future generations depend on a sustainable society. Companies have a large impact on our society and play a large role in achieving sustainability goals. In this context, the role of corporate directors, shareholders and other stakeholders is particularly important. In order to achieve corporate sustainability, current regulatory frameworks usually place the emphasis on the corporate board. By comparison, the potential role of shareholders is considered less pivotal, and looked upon with far more scepticism. This tendency might stem from previous research (for instance, see Sjåfjell, 2017), highlighting that shareholder primacy may have a strong negative impact on corporate sustainability. However, contemporary evidence suggests that institutional investors are becoming more attentive to sustainability goals, as notably highlighted by the recent announcement of Larry Fink, CEO and Chairman of BlackRock in his annual letter of 2018.

In our recent paper, ‘Shareholder sustainability activism in the Netherlands’, we investigate the role of shareholders as an important class of corporate actors in promoting corporate sustainability. We use a new hand-collected database on shareholder activism in the Netherlands, as well as text mining.

It is well-known that US shareholders traditionally formulate more proposals than their European counterparts. Consequently, research on shareholder’s involvement in corporate sustainability is more complex in the European setting. First, we examine recent data on shareholder proposals submitted to the AGMs of listed companies in Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden and the UK, using the Proxy Insight database. Throughout 2013-2017, we identified only 2,427 shareholder proposals all together, out of which a large part is related to slate voting in corporate elections in Italy. Only 207 shareholder proposals were related to corporate sustainability issues. In Austria, Belgium, Finland, Germany, Italy, Luxembourg, the Netherlands, Portugal and Spain, none of the shareholder proposals concerned corporate sustainability, although this does not necessarily mean that shareholders in many European countries are indifferent to sustainability goals.

Indeed, shareholders have other means to actively voice their interests than tabling shareholder proposals. They may also use the right to ask questions during the AGMs to voice their concerns. Since most Dutch companies publish full transcripts of their general meetings, following Principle 4.1.10 of the Dutch Corporate Governance Code, this offers a unique insight on corporate sustainability activism during AGMs. We therefore investigate a sample of 763 AGMs of 69 Dutch-listed companies over the period 2004-2017. After filtering all questions and remarks from shareholders during these meetings, we introduce a categorization framework containing corporate sustainability keywords retrieved from statutory and soft corporate sustainability rules. In accordance with existing definitions of corporate sustainability, we use the following categories: i) environmental sustainability; ii) social sustainability; iii) economic sustainability, and; iv) overall sustainability.

The total number of questions and remarks in the sample amounts to 29,744; 2,913 of these are related to corporate sustainability.  We find that the average number of questions per AGM stays relatively stable during our focus period, with around 40 questions per meeting. However, the proportion of questions and remarks related to corporate sustainability issues increases from around five to twelve percent between 2004 and 2017. In the 2004-2017 period, 782 questions were related to environmental sustainability (26.8%), 900 questions to social responsibility (30.9%), and 1,146 to the overall sustainability category (39.3%). When comparing industries, we find that most corporate sustainability questions are asked by shareholders in the Basic Materials industry; in the Technology and Financials industries, significantly less corporate sustainability questions were asked.

When focusing on institutional investors, who nowadays hold substantial power over listed companies, we observe that the overall number of questions they ask remains stable (around five questions per meeting on average). However, the proportion of corporate sustainability issues they raise significantly increases, from around 2% in 2004 to 20% in 2017.  Given the large variety of topics shareholders may inquire about, twenty percent is a substantial figure, especially considering that institutional investors and larger shareholders often have the opportunity to engage with corporate management directly, in private meetings outside the AGM.


Anne Lafarre is Assistant-Professor at Tilburg University.

Christoph Van der Elst is Professor of Business Law and Economic at Tilburg University, and Ghent University