The ICCR coalition harnesses our collective influence as shareowners in Fortune 500 companies to improve corporate decision-making on environmental and social issues. One of the ways we do this is by filing shareholder resolutions with publicly-traded corporations. These one-page statements appear on the companies’ proxy statements and are voted on by all shareholders at companies’ annual general meetings (AGMs). By virtue of their public nature, resolutions are an effective press/PR lever.
When we reported to you in late January, our coalition had filed 257 resolutions for the 2016 AGM season on issues ranging from climate change and human trafficking, to inclusiveness, food & water sustainability, and corporate lobbying /political spending.
The total number of coalition filings has risen slightly from January to 266.
How have these 266 fared? To sum: more than 30% of our resolutions this year resulted in withdrawals; our members negotiated nearly 90 implementation agreements with companies, which will result in tangible progress for people and planet on a range of issues in the next 12 to 14 months.
117 of 266 have gone to a vote, and have been averaging votes of 24.6% in favor. Sixty of our resolutions achieved votes of 25% or more in favor, while 15 reached 40% or more. Four resolutions – Suncor, “Resilience in a Future Low-Carbon Economy”; Anglo American, “Strategic Resilience for 2035 and Beyond”; Clarcor, “Sustainability Reporting”; and JB Hunt, “Sexual Orientation and Gender Identity Discrimination” -- passed the majority threshold with votes of 50% or more in favor, a clear indication of the importance of the issue to investors.
Our highest votes this year have been 98.2% (Suncor –Resilience) and 96.3% (Anglo American - Strategic Resilience); both focused on climate change. The year’s climate change resolutions performed well as a group, averaging votes of 28.4%. Eighteen of the 32 climate change resolutions going to a vote won 25% or more.
ICCR resolutions calling for greater transparency around corporate lobbying and political spending activities also fared well, averaging 26.76%. The majority – i.e., 25 of 38 – of those resolutions going to a vote earned 25% or more.
We’ll provide a more detailed recap of the proxy season when all the votes are in and meanwhile, the very first resolutions for the 2017 season will be filed starting next month – so stay tuned for updates.
2016 Proxy Season Summary
The number of resolutions filed by ICCR members for the 2016 AGM season rose just over 12% this season to 255, which include 5 filings slated for the spring, a continuation of a four-year trend. Corporate practices related to climate change risks, and lobbying and political spending continue to dominate as resolutions themes and are primarily responsible for driving the overall increase in filings.
ICCR members filed a record 91 resolutions addressing climate change, more than at any time in their history, and 24 more than in the previous year. These filings were motivated in large part by growing recognition of the need for immediate and extensive action on climate change, and by this fall’s historic COP21 agreement in Paris, where 187 countries pledged to do their part to keep global warming below 2C. Fifty-two resolutions dealt primarily with climate change, while an additional 39 addressed it indirectly, as one of multiple concerns. (For the purposes of this article, we categorize resolutions according to their primary focus. For instance, resolutions focusing primarily on lobbying and political contributions, but referencing GHG emissions, are considered lobbying resolutions, etc.)
In an expansion of a strategy we first saw implemented by shareholders last year, resolutions addressed the challenges posed by climate change holistically, from 6 angles – while many resolutions predictably asked corporations to set science-based GHG reduction targets or renewable energy goals, or issue sustainability reports detailing GHG emissions, others took more unusual approaches, framing their “asks” within the context of corporate governance, and called on, for instance, proxy voting services to report on discrepancies between their actual voting practices against climate proposals,and their publicly stated positions in favor of greater disclosures around climate change risk. Similarly, some resolutions asked that sustainability metrics, such as GHG emissions monitoring, be incorporated into executive incentive plans. Other resolutions addressed deforestation and climate change impacts in the supply chains of food and consumer goods companies that use palm oil. Still others challenged corporate lobbying expenditures and membership in the Chamber of Commerce, which has mounted an attack on the EPA’s new Clean Power Plan addressing climate change.
As was the case last year, Exxon and Chevron tied for first place as the recipients of the most ICCR proposals, each receiving 8, including asks related to climate change, corporate governance lobbying, Burma and shareholder rights.
As we approach what will be a hotly contested 2016 presidential election year, filings addressing corporate lobbying and political contributions disclosure predictably constituted the second substantial segment of ICCR member filings in 2016, comprising 24% (or, 62 resolutions) of total filings, up slightly from last year. Shareholders are concerned that corporations continue to invest millions of dollars in undisclosed “dark money” to influence our legislative and political systems, and exert their influence through membership in and donations to organizations like the Chamber of Commerce and the American Legislative Exchange Council.
Corporate governance filings rose this year, with 40 resolutions – up from 22 a year ago. Seventeen of these dealt with shareholder rights, including how shareholder votes are calculated. Twelve asked that all non-binding matters presented by shareholders be decided by a simple majority of the votes cast for and against an item, excluding abstentions, a counting method favored by companies because it disadvantages shareholders, typically by lowering the percentage of votes in favor of shareholder resolutions. Other resolutions called for giving each share an equal vote, arguing that by allowing certain stock (i.e., Class A stock vs. Class B or C) to have more voting power than others, companies take shareholder money but does not let them have an equal voice in company management. Other corporate governance filings addressed shareholders’ right to call special meetings, CEO & Chair separation, the need for an independent board chair, pay disparity, and incorporating diversity metrics into executive pay.
Filings addressing inclusiveness rose slightly this year, with 29 resolutions. Beyond the expected requests for increased diversity in corporate boardrooms (15 filings), and for workplace policies barring discrimination on the basis of sexual orientation or gender identity and expression (6), there were new resolutions calling for greater workplace diversity, and for companies to press for greater diversity among companies in their supply chains. In addition, another new resolution called on companies to close the gender “wage gap” between men and women that has been the subject of much attention in the press and on the campaign trail this past year.
While overall filings on food safety and sustainability decreased this year, new proposals called on companies to join the Fair Food Program, and to assess and report on working conditions in meat processing plants. A new resolution on food waste and loss, which costs Americans an estimated $165 billion per year, was filed at Whole Foods.
Again this year, companies were asked to disclose their water risks, and report on the impact of water on their business operations. An innovative shareholder resolution this year called for companies to implement programs to facilitate safe disposal of prescription drugs, to better prevent water pollution and protect public health.
There were 20 human rights and human trafficking filings, a slight increase over last year’s 17. ICCR partners with the Truckers Against Trafficking (TAT) program, an innovative national anti-trafficking education model that provides resources and training to truckers to help them identify and respond to potential incidents of trafficking. A number of this year’s resolutions asked trucking & transportation companies to implement human trafficking prevention training programs. The standout new resolution in this group called for adoption of principles for minimum wage reform (sent to 7 companies). Another topic of stump speeches on the presidential campaign trail and widely reported in the news due to employee demonstrations, the resolution was sent to companies like Best Buy, CVS, Chipotle, Panera, and Staples.
These are just a few examples of the resolutions ICCR members are sponsoring this proxy season. We invite you to read through this Guide and, after reviewing your portfolio, support the resolutions you can.
Corporate dialogues and shareholder resolutions are two powerful tools that ICCR uses to encourage corporations to improve their social and environmental records. See more.