Sustainable finance
Proxy Advisor
Definition
A proxy advisor is a firm that provides institutional investors with research, analysis and vote recommendations for shareholder meetings, and often vote execution services. Because large asset managers hold shares in thousands of companies, they rely heavily on proxy advisors — principally ISS and Glass Lewis — whose recommendations significantly influence outcomes, including on environmental and social shareholder resolutions and say-on-climate votes.
References
This reference provides supporting context for how “Proxy Advisor” is defined and used.
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Overview
How it is used
Regulators increasingly oversee the sector — SEC rules in the US, the EU Shareholder Rights Directive's transparency requirements for advisors — and investors adopt custom voting policies to reduce dependence on advisor defaults.
Why it matters
Proxy advisors concentrate influence over how the world's largest shareholders vote; their treatment of sustainability issues materially affects corporate accountability.