Good morning.
More detail out this morning on the corporate proxy season, courtesy of our friends at Diligent. The most surprising finding is how thoroughly the “Big 3” investors—BlackRock, Vanguard and State Street—turned against environmental and social shareholder proposals in the past year. In the U.S., BlackRock’s support for E&S proposals dropped from 41.3% in the 2020-21 season, to 23.7% in 2021-22, to a mere 8.7% in 2022-23. Vanguard’s drop was equally precipitous, from 29.6% to 12% to a tiny 3% in the past year. And State Street went from 43.7% to 28.6% to 21.2%. Clear signs of the backlash.
So much for E&S. On the G front, there is a somewhat different story: all three firms stayed strong in their support for “say on pay” advisory votes, with votes remaining over 90%. Diligent’s Josh Black, who published the report, writes that after a period of “upheaval” including “the rise of ESG funds, a pandemic, polarization surrounding the 2020 U.S. election, and social movements centered on diversity, equity and inclusion” the “relationship between companies and their shareholders has returned to normal.” You can read the full report here.
Not everyone thinks this so-called “return to normal” is a good thing. Also out this morning is our second in a series of reports from the Fortune CEO Initiative on how to resist the ESG backlash, written by Anton Vincent, president of Mars North America, and Cid Wilson, CEO of the Hispanic Association on Corporate Responsibility.
Separately, I spoke yesterday with Xerox CEO Steve Bandrowczak, who talked about his plan to reinvent the 117-year-old company. Bandrowczak has been in the top job for a little over a year and believes Xerox can use its existing relationships providing document services to small- and mid-size companies to expand into RPA (Robotic Process Automation) and AI services. “We can help companies solve enterprise challenges without enterprise resources,” he said, mentioning hospitals and law offices as examples. “The beauty of it is, when I talk to big companies like Dell and Microsoft and UiPath and Lenovo, they say: ‘We can’t reach those clients with these (RPA and AI) solutions. So let’s partner with you. You’ve already got feet on the street. You have service technicians and sales technicians. You are the perfect partner to go drive this for us.’”
Bandrowczak said that for the last 15 years, Xerox’s contracts for Managed Print Services have been “renewing down”—which means clients pay less for the same service. “For the first time, in the last three quarters, the renew rate has been higher. Why? Because we’re adding these products and services on top of it.”
Will it work? Reinvention is always hard work, but it starts with a plan.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
