ESG – Calvert tightens its proxy voting standards to require Diversity by Gender and by Color on Boards

In a post earlier today, the President and CEO of Calvert Research and Management, Jon Streur, discussed his view on why Calvert “raised” their standards for proxy voting on board diversity.  Calvert, with over $31 Billion in assets under management, is one of the foremost fund managers who have been utilizing an ESG lens within which to evaluate companies for decades.

Per John, “[a]t Calvert, we have used the power of our proxy vote to hold boards accountable for their attention to diversity for three decades. This year, expectations for corporate diversity are rising, and we are more aware than ever of the value of diverse leadership for long-term corporate performance. For this reason, we are increasing our standards for board diversity.”

As a result of their change in voting standards, Calvert will vote AGAINST the nominating/governance committees of public companies that have fewer than 2 women on the board.

Previously, they voted against the nomination of directors for company boards that lacked representation of women.

They also indicated that for companies in the US, the UK, Australia and Canada, Calvert will also vote AGAINST the nominating/governance committee at public companies that have fewer than 2 people of color on the Board or are less than 40% diverse.

Previously, Calvert’s minimum standard was 1 person of color and a board that was 30% diverse.

Research indicates that diversity is a financially material ESG issue. In research begun in 2019 and continuing currently, Calvert found that in “evaluating the financial materiality of gender diversity factors” that gender diversity factors are associated with improved equity returns for both the U.S. and non-U.S. markets.

Per their data, companies with at least 2 women on the board outperformed when compared to those with fewer women on the board, and U.S. large-cap companies with more than 2 women saw even greater improvement. In the U.S. and certain like markets, similar results were found for ethnically diverse boards.

The Triple Bottom Line: According to Jon and Calvert, “proxy voting is a vital way to hold companies accountable for their commitments to board diversity. This and other tools of structured engagement can help encourage positive change”.

Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on Sustainability and ESG planning and initiatives within their own space.  We would be happy to discussion your proposed project with you.  Contact your Duane Morris attorney for more information.

If you have any questions about this post, please contact Brad A. Molotsky  (, Nanette Heide, Darrick Mix, David Amerikaner or the attorney in the firm with whom you are regularly in contact.

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