Proponents as of mid-Feburary 2024 had filed at least 527 shareholder resolutions on environmental, social and related sustainable governance issues for the 2024 proxy season. This is down by only a few from 536 last year at the same time. It still seems possible the total will reach the 630-year-end total of last year.
CONTACT:
Susana McDermott
Director of Communications
Interfaith Center on Corporate Responsibility (ICCR)
201-417-9060 (mobile)
smcdermott@iccr.org
NEW YORK, NY, TUESDAY, FEBRUARY 27 2024 – Members of the Interfaith Center on Corporate Responsibility and allied investors announced a slate of 63 shareholder proposals for 2024 proxies at a diverse set of companies across multiple sectors calling for increased disclosures and strengthened oversight of corporate political activities. You can read more about these proposals in ICCR’s Proxy Resolutions and Voting Guide.
The vast majority of companies utilize various forms of public policy advocacy to impact legislative and regulatory decisions mainly through lobbying and campaign contributions. This advocacy occurs at all levels of government, from the municipal and state levels to federal legislative and regulatory processes. Statistica reported total corporate lobbying expenditures exceeding $4 billion annually in 2022 with the pharmaceutical, tech, financial services, and oil & gas sectors among the top spenders either through direct lobbying or indirectly through third-party organizations. Some of the issues that attract significant lobbying dollars include efforts by pharmaceutical companies to protect drug patents resulting in higher drug prices; efforts on behalf of fossil fuel companies and heavy polluters to limit environmental regulation at the state and federal levels; and spending by firearms manufacturers to prevent sensible gun control legislation, among many others.
“ICCR members and other responsible investors have long petitioned companies to expand disclosures and adopt standards since guardrails for corporate political activities are so clearly needed,” said Tim Smith, ICCR’s Senior Policy Advisor. “Some corporations have an outsized influence over public policy issues and they need to evaluate if this advocacy is truly in the public interest.”
Through their memberships in trade associations like the U.S. Chamber of Commerce and the National Association of Manufacturers (NAM), and their donations to Super PACs, 527 committees, “social welfare” organizations, and model legislation groups like the American Legislative Exchange Council (ALEC), corporations have an outsized voice on many issues affecting the public interest. Without robust oversight, investors say these political activities run the risk of inviting corruption, damaging democratic structures, and – when these activities conflict with a company’s stated mission and values – causing reputational damage to participating companies.
“Companies exercise considerable power in their direct and indirect lobbying through trade associations and this year, the issues of political spending and lobbying will once again be a high priority for investors,” said Caroline Boden of Mercy Investment Services. “Investors are urging full transparency in those activities as well as careful evaluation of whether they align with a company’s stated values and priorities as any misalignment may create reputational risk and unwanted controversy. We are pleased to see a number of companies responding positively to these appeals resulting in withdrawal agreements and improved corporate responsibility on this issue.”
Investors say the risks of corporate political activity are heightened in the run-up to a highly consequential national election.
“In 2024, it is essential that companies act as positive forces to protect and preserve democracy,” said Matthew Illian of United Church Funds. “Companies can encourage politicians to support fair and free elections as well as carefully scrutinize whether their corporate and PAC funds are channeled to politicians who advance democratic freedoms. Many companies have added specific restrictions on contributions to trade associations stipulating their dues cannot be used for election purposes.”
Last August, ICCR members sent a letter to CEO members of the Business Roundtable urging them to assess whether their policy advocacy reinforces or undermines democratic principles including free and fair elections and healthy civic engagement.
“Given the stakes of this year’s elections, companies need to pay even greater attention to the impact and risks of their political spending,” said Bruce Freed, President of the Center for Political Accountability (CPA). “CPA has several resources to help guide companies and their investors including Corporate Underwriters and the Democracy Gap which examines how company political spending has reshaped state politics and created serious risks for companies, shareholders, and our democracy, and our Guide to Corporate Political Spending and Guide to Becoming a Model Code Company which give management and directors the framework for approaching, governing and assessing political spending to safeguard companies.”
Since the proposals were filed, there have been constructive discussions with companies and several agreements reached between shareholders and companies allowing the proponents to withdraw the proposals. Among these were negotiated agreements with Starbucks and Boeing, which agreed to provide detailed additions to their lobbying reports. In addition, a resolution at Stride nearly reached a majority vote with 49.5% shareholder support.
ICCR members urge companies to implement the Erb Principles for Corporate Political Responsibility and the CPA-Zicklin Model Code of Conduct for Corporate Political Spending which provide a framework for companies to approach and govern their election-related spending to ensure it is consistent with corporate values and the goal of supporting democratic institutions and the public interest.
About the Interfaith Center on Corporate Responsibility (ICCR)
The Interfaith Center on Corporate Responsibility (ICCR) is a broad coalition of more than 300 institutional investors collectively representing over $4 trillion in invested capital. ICCR members, a cross-section of faith-based investors, asset managers, pension funds, foundations, and other long-term institutional investors, have over 50 years of experience engaging with companies on environmental, social, and governance (“ESG”) issues that are critical to long-term value creation. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on Twitter/X (@iccronline), LinkedIn, and Facebook.
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Letter presses corporations to align election spending with core corporate values.
NEW YORK, NY, THURSDAY, AUGUST 10, 2023 – Today members of the Interfaith Center on Corporate Responsibility (ICCR) announced they had sent letters to members of the Business Roundtable urging them to align political spending with their stated core values, to mitigate both reputational risks to the company, and broader risks to democracy.
Investors have long called for the alignment between a company’s political engagement and its stated values and mission arguing that any misalignment represents a source of both firm-level and systems-level risk that redounds to all corporate stakeholders.
ICCR members, a cross-section of faith-based investors, asset managers, pension funds, foundations, and other long-term institutional investors, have over 50 years of experience engaging with companies on environmental, social, and governance issues that are critical to long-term value creation, including political spending.
The investors question how corporate political donations may contribute to the degradation of democratic systems including free and fair elections at both the federal and state levels and a healthy civic discourse that supports free speech and tolerance for diverse viewpoints.
According to the letter: “Companies and investors both depend on a resilient democracy and strong rule of law to provide the economic and legal certainty that facilitates long-term market stability and allows companies to compete on the merits of their products and services. For decades, investors have sounded alarms about the strains that corporate political spending puts on our democratic institutions…”
According to a study released by the Center for Political Accountability (CPA), public companies “are pouring millions of their dollars into political spending that ultimately bankrolls the attack on democracy from Washington, D.C. to state capitals nationwide.”
Said Tim Smith, ICCR’s Sr. Policy Advisor, “Company’s election-oriented political spending or lobbying is both direct and indirect through its trade associations and their contributions to politically active nonprofits. Companies face reputational risk when they publicly promote one position while their trade associations actively promote an opposite position. The insurrection at the U.S. Capitol on January 6th, 2021 offers a fresh example of the seriousness of these risks when the press quickly and forcefully called out corporations that had supported the legislators who, under false pretenses, failed to certify the 2020 Presidential election. As leaders in their respective sectors, we are pleased to offer these tools to help BRT companies better navigate these risks and thereby model best practices for their peers.”
The first key resource is the Erb Principles for Corporate Political Responsibility, released in March after a lengthy, deliberative stakeholder process by the Erb Institute of the University of Michigan. Developed as a complement to the BRT’s statement on the Purpose of the Corporation and the BRT’s actions to support the peaceful transfer of power in 2021, the Erb Principles propose a practical, non-partisan, and comprehensive definition of corporate political responsibility (CPR ) as a first step in establishing CPR as a new norm that will reduce business risk, strengthen civic trust and foster collaborative problem-solving.
“BRT members believe that creating long-term value for shareholders requires creating value for customers, employees, and society,” said Elizabeth Doty, Director, Corporate Political Responsibility Taskforce, at The Erb Institute at the University of Michigan. “But their ability to deliver on this ‘license to operate’ depends on well-functioning markets, a stable regulatory environment, strong civic institutions, a healthy civil society, and a flourishing natural environment. We developed the Erb Principles for CPR to clarify what their conviction means for responsible corporate political influence and how companies can contribute to the conditions for shared prosperity. We were delighted to discover that business leaders and stakeholders with diverse views on issues, agreed on these foundational, non-partisan principles.”
The second important resource is the CPA-Zicklin Model Code of Conduct for Corporate Political Spending, developed by the Center for Political Accountability and The Wharton School’s Zicklin Center for Governance and Business Ethics, with extensive input from corporate governance experts, investors, and companies. The Model Code provides a broad framework for companies to approach and govern their election-related spending with treasury funds. Among other things, the Model Code recommends that companies have policies for their spending, ensure robust board oversight, disclose all expenditures, and analyze societal impacts and alignment of expenditures with stated values.
Said Bruce Freed, Director of the Center for Political Accountability, “We are pleased that ICCR calls on companies to adopt the Model Code. This is an important action for protecting companies and our democracy. The Model Code provides companies with a framework for approaching and governing their election-related spending. Beyond that, it gives corporate leadership greater control over their political spending and a clear justification to “just say no.”
Added Smith, “In its March 2021 statement following the Jan 6th attack on Congress, the BRT said, ‘The right to vote is the essence of a democratic society… Business Roundtable members believe state laws must safeguard and guarantee the right to vote’. Our intention in sending this letter is to remind BRT members that regular scrutiny of their corporate political activities is imperative should this statement ring true.”
About the Interfaith Center on Corporate Responsibility (ICCR)
The Interfaith Center on Corporate Responsibility (ICCR) is a broad coalition of more than 300 institutional investors collectively representing over $4 trillion in invested capital. ICCR members, a cross-section of faith-based investors, asset managers, pension funds, foundations, and other long-term institutional investors, have over 50 years of experience engaging with companies on environmental, social, and governance (“ESG”) issues that are critical to long-term value creation. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on Twitter, LinkedIn, and Facebook.
The need to reduce GHG emissions to limit warming and reach net zero by 2050 or sooner has never been more urgent yet climate progress has been hindered for decades by aggressive lobbying on the part of corporations (mainly in the oil & gas sector) and their trade associations. Because investors understand that corporate climate policy is a journey, not a destination, ICCR has developed new guidance “Leading Lobbying Practices to Drive 1.5°C Policy Action. “The authors researched the disclosures of over 70 companies across the globe (representing nine countries and over a dozen industries in total) looking for investor-friendly practices that drive company ambitions towards alignment with the Paris (climate) Agreement and a 1.5°C trajectory. We also looked for companies that fulfilled the 14 key indicators of the newly-launched Global Standard for Responsible Climate Lobbying, which became public in March 2022 after a two-year consultation involving investors, companies, and stakeholders from 19 countries in all. You can download your copy here.
Three proposals on company proxy scheduled for a vote at annual meeting of stockholders on June 1st.
NEW YORK, NY, THURSDAY, APRIL 28TH, 2022 – When Walmart ($WMT) shareholders attend the company’s annual meeting on June 1st they will be voting on three shareholder proposals raising areas where they believe company performance may be falling short.
Walmart has stated it “aims to do more than operate responsibly and mitigate business risk….the company wants to help transform related societal systems (e.g., food systems, workforce development systems) for more equitable and sustainable outcomes.” However, while Walmart has made progress in recent years on several issues of sustainability, given its size, influence, and global reach, shareholders are calling on the company to model genuine leadership by creating value for all its stakeholders.
Two of the three proposals center on Walmart’s workers: the first seeks to improve communication between frontline hourly workers and decision-makers on the board; the second seeks to understand how Walmart’s starting wage for new associates, often the lowest-paid members of Walmart’s workforce, aligns with the company’s stated racial justice commitments.
A proposal filed by Cynthia Murray, a long-time Walmart associate, Walmart shareholder, and founding member of United for Respect, asks the Board of Directors to create a Pandemic Workforce Advisory Council composed of hourly Associates, to provide guidance to the Board on pandemic-related workforce issues, including health and safety measures, whistleblower protections, and paid sick leave.
Walmart’s founder, Sam Walton, exalted the value of Associate input: “The folks on the front lines—the ones who actually talk to the customer—are the only ones who really know what’s going on out there. You’d better find out what they know.”
According to the proposal: Improving the flow of information between frontline workers and Walmart’s board, which oversees the company’s management and has the power to set policy, would lead to more timely, consistent, and effective action at the store level and would reduce reputational and financial risks to the company.
“Walmart contends it has multiple communication channels for associates to express concerns to company leadership, yet associates have reported being retaliated against for raising safety issues to store managers. Clearly, existing channels to communicate directly with frontline workers are ineffective,” said Bianca Agustin, Corporate Accountability Director at United for Respect. “A pandemic advisory council would provide directors with a formal mechanism to engage directly with associates, unfiltered by middle management, and help ensure company policies and practices reflect associate experiences and needs.”
A second proposal focused on workers asks how Walmart’s racial justice goals and commitments align with the starting pay for Walmart Associates. As our nation confronts the challenges of an ever-widening and racialized wealth gap and the U.S. Bureau of Labor Statistics reports record turnover in the restaurant and retail industries, investors say Walmart must do more to address pay inequities in its ranks.
Walmart Associates have identified wages as the most important element of their compensation and higher wages have been shown to improve recruitment and attendance, promote better health, and reduce turnover and operational problems leading to better business performance. Moreover, given the concentration of people of color in low-paying jobs, investors argue boosting starting wages would advance Walmart’s stated commitment to helping address the structures of systemic racism. As the company achieves record profits and stock price, there needs to be a conversation about the equitable or even reasonable balance between shareholder returns and worker compensation.
“Walmart’s CDEI Report provides significant detail about the gender and racial makeup of Walmart’s workforce, but it does not contain any information about how those demographics correlate with wages,” said Sr. Sue Ernster, Vice President & Treasurer/CFO, Franciscan Sisters of Perpetual Adoration. “The report we requested would help Walmart leadership understand the economic realities facing the company’s hourly frontline Associates.”
The third shareholder proposal asks Walmart to disclose corporate spending on direct and indirect lobbying activities to assess whether Walmart’s lobbying is consistent with the company’s stated goals and interests.
Investors say Walmart has made progress in its disclosure of some of the requested information on lobbying activities including the disclosure of key trade association memberships and certain other organizations, coalitions and initiatives that help to shape public perspectives on ESG matters. Walmart has also taken steps to better articulate how the board oversees these engagements with these third parties. However, investors are concerned that Walmart has not provided actual spending amounts that would help to clarify the degree of involvement with these organizations.
Corporate-funded lobbying and grassroots groups may seek to advance policy that is contrary to Walmart’s stated positions at state and local levels, which may have broader public policy implications on ESG-related objectives.
“Companies do not have a limit on how much spending they do through non-profits and so-called special welfare organizations,” said Marcela Pinilla of Zevin Asset Management. “These actions, some of them designed to spread misinformation, can expand across state lines and shape civil society’s perception of the social and environmental challenges we face. Walmart has now disclosed the names of the third parties it allies with, but we are concerned that stopping short of disclosing its spending presents reputational risk when its lobbying contradicts Walmart’s public policy positions. This leaves a massive blind spot for investors.”
Proposals calling for disclosure around lobbying spending generally receive strong shareholder support with many majority votes. The investors note that a similar proposal garnered 22% of the vote in 2021 which, when excluding shares held by Walmart family and insiders, would have achieved a 54% majority vote.
The proponents are seeking the support of their fellow Walmart shareholders for these proposals when they come to a vote at the annual meeting on June 1st.
About the Interfaith Center on Corporate Responsibility (ICCR)
Celebrating its 51st year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. Its 300-member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs, and other socially responsible investors with combined assets of over $4 trillion. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on Twitter, LinkedIn, and Facebook.
In a letter to Congress, investors make clear that they view an election system free of discriminatory practices and the political influence of “dark money” as central to a strong democracy where businesses can thrive.
NEW YORK, NY, TUESDAY, AUGUST 10TH, 2021 – A group of 71 institutional investors announced they had sent a letter to Senators urging passage of the For the People Act, legislation introduced by Maryland Representative John Sarbanes intended to safeguard democratic structures by expanding voting opportunities, banning discriminatory gerrymandering and promoting transparency regarding campaign finance.
Investors say the For the People Act will create a level playing field for all Americans to exercise their Constitutional right to vote and help fortify our democracy, leading to a stable economic environment that favors both the public interest and business.
The false narrative of a stolen election has been used to justify the introduction of an alarming and ongoing wave of state-level voting laws – nearly 400 bills across 49 states– designed to restrict American’s ability to register to vote and cast ballots early or by mail. These bills would restrict citizen’s say on critical governmental systems such as healthcare, education, and the economy. Moreover, these bills are largely seen as discriminatory as they would disproportionately disenfranchise communities of color.
“The right to vote is absolutely critical to a functioning democracy, a stable business environment and long-term economic growth in the United States,” said Illinois State Treasurer Michael Frerichs. “Our nation works best when everyone has a voice and everyone is represented. When voting rights are taken away or restricted, we risk creating political and economic instability. That’s why our group, composed of institutional investors, is urging Congress to end discriminatory practices and protect the right to vote.”
While support is building among legislators and the public for the Act, opponents like industry trade group the U.S. Chamber of Commerce (U.S. Chamber) are aggressively attempting to thwart its passage.
“The U.S. Chamber’s opposition to the For the People Act conflicts with its October 2020 statement that ‘[t]he strength of our nation’s democracy depends on the integrity and fairness of our elections’ and it runs counter to the statements of business leaders across the country who support the protection of voting rights,” said Sister Nora Nash, Director of Corporate Social Responsibility of the Sisters of St. Francis of Philadelphia. “These business leaders understand that the critical challenges we face including climate change, health care, and workers’ rights are systemic in nature and require the full and equitable participation of our citizenry to resolve them.”
One of the key goals of the For the People Act is to reform campaign finance laws and expose the flow of “dark money”, or anonymous political donations, in our nation’s politics in an attempt to limit its corrupting influence on our democracy. As one of the nation’s largest lobbying groups and funders of “dark money” on elections, the Chamber’s ability to funnel money into the political system without accountability would be significantly curtailed should the For the People Act become law.
Said Marcela Pinilla, Director of Sustainable Investing at Zevin Asset Management, “To the degree that special interest groups like the Chamber can purchase unlimited power and influence without accountability it will always come at the expense of citizen voters. Investors want a climate in which corporate political engagement is transparent and accountable as evidenced by the record numberof shareholder proposals calling for disclosure around political activities that passed at annual meetings this spring. The For the People Act calls for sensible guardrails around campaign finance and it is one of the reasons the investor community strongly supports the bill.”
About the Interfaith Center on Corporate Responsibility (ICCR)
Celebrating its 50th year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. Its 300-member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs, and other socially responsible investors with combined assets of over $4 trillion. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on Twitter, LinkedIn and Facebook.
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Attack on Congress seen as wake up call for companies on the inherent risks of corporate money in politics to both business and the public interest.
NEW YORK, NY, THURSDAY, FEBRUARY 11TH, 2021 – A group of 81 institutional investors representing $US1.69T have endorsed a statement sent to CEO members of the Business Roundtable in the aftermath of the January 6th attack on Congress, urging them to refrain from the practice of political giving for at least six months or until such time as a thorough risk assessment can be undertaken.
Citing the potential risks of political spending not only to businesses, but to the broader political system and the public interest, the investors further called on companies to consider implementing more permanent steps to end all political spending including through direct donations to politicians, Political Action Committees (PACS), Super PACs, 527 committees or anonymously through trade associations and “social welfare” organizations (also known as 501(c)(4) groups).
In response to the 147 members of Congress who voted against certifying the results of the Presidential election, many companies saw the reputational risks inherent in these donations and, as a result, issued statements announcing that they were temporarily withdrawing their financial support for the legislators; another group of companies comprised of mainly banks and tech companies announced they were suspending all political spending, pending a more comprehensive review.
The investors say these suspensions and reviews are good first steps, but bolder action is needed.
“Many corporations are urgently evaluating appropriate options for their companies related to political spending, a welcome and important step; this is a timely moment for an in-depth board review of these practices,” said Tim Smith of Boston Trust Walden. “Investors have long raised the issue of reputational risk for companies from controversial lobbying and political spending related to elections.”
The statement cites the distortion of public policy and corrupting influence on political systems caused by corporate political spending and calls out its destabilizing effect on the broader economic and cultural environment which can inhibit the long-term sustainability of business. This viewpoint has been shared in many opinion pieces, including by prominent industry thought leaders.
Specifically, the investors request that companies strongly consider voluntarily:
- Ending all political spending at the federal, state and local levels;
- Shutting down corporate Political Action Committees (PACs);
- Ending all contributions to Super PACs;
- Ending contributions to partisan state-focused 527 committees;
- Ending the flow of corporate “dark money” to so-called “nonprofit” groups;
- Fully disclosing how much and to which intermediaries they contribute, including trade associations and other third-party groups that use that money to influence policy.
“While companies may perceive a short-term gain from funneling money to elected officials, the reputational risk that they face and, more critically, the corrosive effect on democracy of corporate money in politics should give them pause,” said Josh Zinner, ICCR’s CEO. “January 6th should have sounded the alarm: it is vitally important for companies to carefully evaluate the problematic impacts of their political spending.”
The investors say they are bringing these requests into their ongoing engagements with portfolio companies.
About the Interfaith Center on Corporate Responsibility (ICCR)
Celebrating its 50th year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. Its 300-member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs and other socially responsible investors with combined assets of over $2 trillion. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on Twitter, LinkedIn and Facebook.