In the first quarter of 2021, we highlighted diversity, equity, and inclusion (DEI) and climate change among our stewardship priorities for the year. We believe these issues can affect long-term investment outcomes, and we seek to align our proxy voting decisions with our engagement efforts to encourage improvement. We wrote letters to all S&P 500 companies, communicating our updated voting approach, continuing our longstanding practice of engaging on these issues. We voted against the reelection of nominating/governance committee chairs at 28 companies in the index that failed to disclose the racial and ethnic composition of their boards. We believe board diversity helps companies make better strategic decisions. We were not alone in using our vote to encourage improvement: Reelection rates during the 2021 voting season for directors at these companies averaged 85%, lower than the typical 95%. In 2022, we plan to repeat this voting pattern for the S&P 500 and may expand our approach to other indices.

Climate change continues to be a priority of our voting and engagement efforts because of the significant long-term financial risks we believe it poses for economies, markets, and therefore, our clients’ investment portfolios. In 2021, we supported several shareholder proposals asking companies to take specific steps to align with the Paris Agreement and improve climate-risk reporting. We generally support proposals requesting board oversight of a company’s political contributions and lobbying activities or those seeking improved disclosures, particularly where material inconsistencies in reporting and strategy may exist with respect to climate plans. In assessing shareholder proposals related to lobbying, we also focus on the transparency of existing disclosures.

New for the 2021 voting season were proposals from management and shareholders alike seeking shareholder approval of climate transition plans (“Say on Climate”). While the proposals varied in quality due to the absence of market standards, we assessed each plan on its merits, applying our knowledge of companies held in portfolios we manage on our clients’ behalf as well as our climate transition-risk research capabilities.

Finally, we advocated for best practices with regulators. To the US Securities and Exchange Commission, we communicated our support for mandatory disclosure of material climate risks, including an…