State Street Global Advisors has published an analysis of its proxy voting, suggesting that its support for activists has fallen thanks to issuers’ greater responsiveness, sympathy for management during the pandemic, and more short-termism from dissidents.

In the white paper, State Street’s Global Head of Asset Stewardship Ben Colton and Ryan Nowicki, an assistant vice president, asset stewardship, said that despite the quality of activist nominees increasing, the investor’s support for activists has decreased in the last six proxy seasons from 39% to 18%.

“A lack of focus and substance on long-term strategy in dissidents’ rationale, coupled with engagement models that over-emphasize short-term performance periods, which come at the expense of long-term investor interests and could result in the ‘greenwashing’ of ESG issues,” were among reasons for the falling support, the pair wrote.

State Street is following BlackRock and Vanguard in giving select clients more power to vote their shares, specifically those in separately managed account structures, and supports legislative efforts to extend those. However, it said it was watching the market for signs of short-term agendas proliferating and companies failing to meet quorums.

Colton and Nowicki said the combination of the universal proxy card and inflationary pressures, geopolitical uncertainty, and market volatility ensured that stewardship teams were at “a critical juncture” that had “the potential to significantly alter the landscape of shareholder activism.”

“While there may always be an inherent divergence between investors with short and long-term objectives, we believe that healthy competition, constructive dialogue, and transparent debate fuel shareholder democracy,” the paper concluded. “As such, resisting any efforts to disenfranchise the voice of long-term shareholders will benefit the average investor, who has benefited greatly from the development of strong and efficient capital markets.”