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Resolution Details

Company:

Cenovus

Year:

2023

Issue Area:

Climate Change

Focus Area:

Paris-Aligned Climate Lobbying

Status:

Vote

Vote Percentage:

99.00%

Resolution Text

Resolved: Shareholders request that the Board produce a report, at reasonable cost and omitting proprietary information, outlining whether and how Cenovus is aligning its direct and indirect lobbying and public policy advocacy with its net zero goal. The report should be repeated periodically and disclose evaluation criteria and external stakeholders consulted, if any.

Supporting Statement:

Cenovus is committed to net zero by 2050[1] and to support Canada’s Paris Agreement commitments.[2]

Last year, leading investors released the Global Standard on Corporate Climate Lobbying[3] to help investors assess whether companies’ lobbying, and political engagement are consistent with climate progress. In addition, more than twenty shareholder resolutions were filed last year seeking disclosure that a corporation’s climate lobbying is aligned with the Paris Agreement.[4]

Cenovus’ statement on Advocacy and memberships[5] says that the company does not make political contributions and that it complies with lobbying disclosure laws. It also discloses membership in advocacy organizations like the Canadian Association of Petroleum Producers (CAPP), Canada Action, and the Pathways Alliance. It does not disclose the company’s commitment to net zero or its support of Canada’s commitments to the Paris Agreement, nor commit to aligning its lobbying accordingly.

Cenovus has spoken out against the Canadian Government’s plans to reduce emissions with an oil and gas emissions cap.[6] CAPP[7], Canada Action/Oilsands Action and the Pathways Alliance have all made public efforts to oppose the federal government’s cap on oil and gas emissions.[8]

The federal lobby registry shows Cenovus, CAPP and Pathways Alliance meeting frequently with federal officials,[9] but there is no disclosure by Cenovus regarding whether these representations sought to oppose climate action, as its public statements suggest.

In SHARE’s climate lobbying benchmark of Canadian oil and gas companies, Cenovus scores an average 29% on a range of indicators including transparency and alignment on climate.[10]

InfluenceMap, which serves the CA100+ benchmark, scored Cenovus a D+, saying that “Cenovus does not appear to be supportive of policies to respond to climate change.”[11] InfluenceMap also ranks CAPP as the fifth most “negative and influential” industry association in the world on climate.[12]

Cenovus’ direct and indirect lobbying – through membership in CAPP, the Pathways Alliance and Canada Action – is opaque and may be inconsistent with its net zero commitment and its stated support of Canada’s commitments under the Paris Agreement. This lack of disclosure and potential inconsistency is a governance risk that merits due consideration and oversight by the Cenovus Board.

We respectfully request that shareholders vote FOR this proposal.

[1] https://www.cenovus.com/Sustainability/Environment/Climate-and-GHG-emissions

[2] https://www.cenovus.com/News-and-Stories/News-releases/2021/2244215

[3] https://climate-lobbying.com/

[4] https://www.ceres.org/news-center/press-releases/shareholders-escalate-campaign-pressing-companies-walk-their-talk

[5]  https://www.cenovus.com/Our-company/Governance/Advocacy-and-memberships archived at https://archive.ph/SK3Yi

[6] https://www.naturalgasintel.com/cenovus-chief-urges-less-aggressive-canada-ghg-targets-for-natural-gas-oil-producers/

[7] https://www.nationalobserver.com/2022/09/19/news/grassroots-group-ran-facebook-ads-against-emissions-cap-oil-lobby-paid

[8] https://docs.google.com/document/d/16piZO0QIDTQxCS3Qdls_pJwQYlaNhgHbNFz_9SRvQck/edit?usp=sharing

[9] https://lobbycanada.gc.ca/app/secure/ocl/lrs/do/vwRg?cno=260442&regId=929389&blnk=1 and https://lobbycanada.gc.ca/app/secure/ocl/lrs/do/clntSmmry?clientOrgCorpNumber=226641&sMdKy=1672944913522 and https://lobbycanada.gc.ca/app/secure/ocl/lrs/do/clntSmmrySrch?registrationText=pathways+alliance&searchType=Search

[10] https://share.ca/wp-content/uploads/2022/09/SHARE_Pulling-back-the-curtain-2022-EN.pdf

[11] https://lobbymap.org/company/Cenovus-Energy

[12] https://influencemap.org/report/Corporate-Climate-Policy-Footprint-2022-20196

  

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Resolution Details

Company:

Chevron Corp.

Year:

2023

Issue Area:

Climate Change

Focus Area:

Climate Governance, Just Transition

Status:

Vote

Vote Percentage:

18.60%

Resolution Text

SUPPORTING STATEMENT

As the nation and our Company prepare for and participate in a transitioning energy economy, our Company should play a role to in helping provide security for impacted workers and communities where our Company operates.

Our Company’s Chairman and CEO Michael K. Wirth has personally signed the Business Roundtable’s Statement on the Purpose of a Corporation which affirmed our Company’s commitment to serve all stakeholders, including “investing in our employees” and supporting the communities in which we work.” (https://opportunity.businessroundtable.org/ourcommitment/)

UN PRI’s Statement of Investor Commitment to Support a Just Transition on Climate Change states that “the responsible management of workforce and community dimensions of climate change are increasingly material drivers for value creation.” (https://www.unpri.org/download?ac=10382)

In the International Labour Organization’s (ILO) 2015 Guidelines for a Just Transition towards Environmentally Sustainable Economies and Societies for All, ILO emphasizes that the transition to environmentally sustainable economies and societies involves “the pivotal role of employers” and “anticipating impacts on employment, adequate and sustainable social protection for job losses and displacement, skills development and social dialogue, including the effective exercise of the right to organize and bargain collectively.” (https://www.ilo.org/wcmsp5/groups/public/@ed_emp/@emp_ent/documents/publication/w cms_432859.pdf)

In its 2021 Corporate Sustainability Report, the Company stated that it conducts stakeholder engagement that includes discussing climate change and energy transition with employees. (https://www.chevron.com/-/media/shared-media/documents/chevron-sustainability-report- 2021.pdf) However, in its 2021 Climate Change Resilience Report where the Company outlined and discussed transition risks that covered policy, technology, market, legal and reputational risks, it did not mention any socioeconomic risks on workers and communities or how its stakeholder engagement with employees and communities influences its climate change response and mitigation plan. (https://www.chevron.com/- /media/chevron/sustainability/documents/2021-climate-change-resilience-report.pdf)

For these reasons, it is imperative that the Board creates the proposed report as a first step towards understanding and mitigating the impact of future plant closings and transition on workers and communities where the Company operates.

We urge shareholders to vote “FOR” this proposal.

  

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Resolution Details

Company:

Meta (Facebook Inc.)

Year:

2023

Issue Area:

Corporate Governance

Focus Area:

Executive Compensation, Risk Management

Status:

Vote

Vote Percentage:

7.20%

Resolution Text

On October 5, 2021, Frances Haugen, a former Company data scientist, testified before the U.S. Senate, highlighting the Company’s unmitigated prioritization of profits:

I’m here today because I believe Facebook’s products harm children, stoke division and weaken our democracy.

The Company reached 2.96 billion users in the third quarter of 2022. Its platforms affect users’ perceptions, and these perceptions affect social institutions and the ability of the global community to address catastrophic threats. As one expert stated:

Facebook is becoming the last bastion of climate denial.

Company personnel know its content is harmful:

We know that COVID vaccine hesitancy has the potential to cause severe societal harm.

We make body image issues worse for one in three teen girls.

But a former employee says the Company accepts those harms to increase its profits:

The company’s leadership knows how to make Facebook and Instagram safer, but won’t make the necessary changes because they put their astronomical profits before people…

According to the 2022 proxy statement, the 2021 bonus plan was intended “to motivate executive officers to focus on company priorities and to reward them for individual results and achievements.” The calculations of Company priorities included: “Continue making progress on the major social issues facing the internet and our company, including privacy, safety, and security.” The proxy statement noted: “None of these priorities were assigned any specific weighting or dollar amount of the target bonus.”

This level of accountability for these social issues seems inadequate to the task of ensuring that the executive officers are not motivated to boost traffic and advertising revenues to increase their own compensation when doing so would lead to environmental and social damage that harms the economy and the portfolios of diversified shareholders. Essentially, the current plan allows executives to be rewarded for profits based on decisions that harm the economy.

Resolved: Shareholders request that the Board Compensation, Nominating and Governance Committee prepare a report assessing the feasibility of integrating specific weights or dollar amounts to base and bonus pay calibrated consistent with the costs externalized by Company operations, including costs imposed on the global economy and the environment.

Supporting Statement:

In preparing this report, the Committee should identify quantifiable negative externalities, such as environmental costs, affected social determinants of health, societal disruption, and other damage attributable to Company activities that will be absorbed by the economy, as well as those negative externalities for which quantification is not feasible, but for which a reasonable approximation or relevant measure may be developed. The weights or dollar amounts may be calculated proportional to the level of externalities imposed by the Company with such amounts calculated to offset any incentive to create such externalities when doing so would improve the Company’s financial performance.

  

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Resolution Details

Company:

Exxon Mobil Corporation

Year:

2023

Issue Area:

Climate Change

Focus Area:

Climate Governance, Just Transition

Status:

Vote

Vote Percentage:

16.60%

Resolution Text

RESOLVED: The shareholders of Exxon Mobil Corporation (the “Company”), hereby request that the Board of Directors create a report regarding the social impact on workers and communities from closure or energy transition of the Company’s facilities, and alternatives that can be developed to help mitigate the social impact of such closures or energy transitions. The report should be prepared at reasonable cost, omitting proprietary information, and be available on the Company’s website by the 2024 Annual Meeting of Shareholders.

SUPPORTING STATEMENT

As the nation and our Company prepare for and participate in a transitioning energy economy, our Company should play a role to in helping provide security for impacted workers and communities where our Company operates.

Our Company’s Chairman and CEO Darren W. Woods has personally signed the Business Roundtable’s Statement on the Purpose of a Corporation which affirmed our Company’s commitment to serve all stakeholders, including “investing in our employees” and supporting the communities in which we work.” (https://opportunity.businessroundtable.org/ourcommitment/)

UN PRI’s Statement of Investor Commitment to Support a Just Transition on Climate Change states that “the responsible management of workforce and community dimensions of climate change are increasingly material drivers for value creation.” (https://www.unpri.org/download?ac=10382)

In the International Labour Organization’s (ILO) 2015 Guidelines for a Just Transition towards Environmentally Sustainable Economies and Societies for All, ILO emphasizes that the transition to environmentally sustainable economies and societies involves “the pivotal role of employers” and “anticipating impacts on employment, adequate and sustainable social protection for job losses and displacement, skills development and social dialogue, including the effective exercise of the right to organize and bargain collectively.” (https://www.ilo.org/wcmsp5/groups/public/@ed_emp/@emp_ent/documents/publication/w cms_432859.pdf)

In its Advancing Climate Solutions 2022 Progress Report, the Company stated that it plans to invest more than $15 billion over the next six years under the International Energy Agency’s (IEA) Net Zero Emissions by 2050 (NZE) scenario to reduce emissions through carbon capture and storage, hydrogen and biofuels. The report discussed the Company’s process to address socioeconomic risks before pursuing a new development, but the report did not discuss the implications for workers and communities when a refining, petrochemical or production facility is transitioning or closed. (https://corporate.exxonmobil.com/climate-solutions/advancing- climate-solutions-progress-report)

For these reasons, it is imperative that the Board creates the proposed report as a first step towards understanding and mitigating the impact of future plant closings and transition on workers and communities where the Company operates.

We urge shareholders to vote “FOR” this proposal.

  

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Resolution Details

Company:

McDonald’s Corp.

Year:

2023

Issue Area:

Health

Focus Area:

Antibiotics

Status:

Vote

Vote Percentage:

18.70%

Resolution Text

RESOLVED, shareholders ask that the board of directors institute a policy that the Company (“McDonald’s”) comply with World Health Organization (“WHO”) Guidelines on Use of Medically Important Antimicrobials in Food-Producing Animals (“WHO Guidelines”)1 throughout McDonald’s supply chains.

SUPPORTING STATEMENT: McDonald’s is the largest beef purchaser in the United States and one of the largest in the world; its policies thus have tremendous influence on the market as a whole. Investor activists applauded2 McDonald’s when it committed in 2018 to reduce antibiotics use in all beef sold in its restaurants, and to announce reduction targets by the end of 2020.3 McDonald’s has not done so. To the contrary, McDonald’s has been weakening its antibiotics use commitments in its more recent statements,4 and recently dropped its commitment to reduction targets altogether.5

Antibiotics overuse is known to exacerbate antimicrobial resistance (“AMR”), which the WHO describes as “one of the top 10 global public health threats facing humanity.”6 AMR poses a systemic threat to public health and the economy. When the efficacy and availability of life-saving drugs are compromised, the entire economy suffers. And when the economy suffers, investors lose. By 2050, AMR could cause $100 trillion in lost global production,7 thus lowering the economy’s intrinsic value.

McDonald’s policies deviate from the WHO Guidelines, which recommend that “farmers and the food industry stop using antibiotics routinely to promote growth and prevent disease in healthy animals” and provide evidence-based recommendations and best practices. Moreover, a recent investigation found Tyson Foods—which McDonald’s named “Global Supplier of the Year” in 2022—sold numerous meat products between 2015 and 2020 that were contaminated with campylobacter and salmonella, more than half of which were antibiotic-resistant strains.8

As another company with a meat supply chain explained, robust AMR protections raise “[t]he challenge of individual costs and widely distributed societal benefits.”9 But for diversified investors, the portfolio-wide costs associated with AMR are paramount.

McDonald’s decision not to prioritize broad AMR risks does not account for its diversified owners’ interests in optimizing public health, the economy, and their long-term portfolio returns. By engaging meat suppliers that use medically important drugs beyond WHO Guidelines, McDonald’s adds to the economic threat AMR poses to its diversified shareholders: reducing the economy’s intrinsic value will directly reduce diversified portfolios’ long-term returns.10 McDonald’s profit gain that comes at the expense of public health is a bad trade for McDonald’s diversified shareholders, who rely on broad economic growth to achieve their financial objectives.

By changing its policies and adhering to the WHO Guidelines, McDonald’s could save lives, contribute to a more resilient economy, and protect its diversified investors’ portfolios.

1 https://apps.who.int/iris/bitstream/handle/10665/258970/9789241550130-eng.pdf
2 https://www.npr.org/sections/thesalt/2018/12/11/675559302/there-are-lots-of-antibiotics-in-the-beef-supply-mcdonalds-vows-to- change-this
3 https://corporate.mcdonalds.com/content/dam/gwscorp/scale-for-good/McDonalds_Beef_Antibiotics_Policy.pdf
4 https://www.nrdc.org/sites/default/files/chain-reaction-vi-restaurants-antibiotic-use-2021-report.pdf
5 https://www.keepantibioticsworking.org/blog/reduceantibiotics
6 https://www.who.int/news-room/fact-sheets/detail/antimicrobial-resistance
7 https://amr-review.org/sites/default/files/160518_Final%20paper_with%20cover.pdf
8 https://www.thebureauinvestigates.com/stories/2022-03-16/superbugs-on-the-shelves-diseased-chicken-being-sold-across- america
9 https://www.yum.com/wps/wcm/connect/yumbrands/41a69d9d-5f66-4a68-bdee- e60d138bd741/Antimicrobial+Resistance+Report+2021+11-4+-+final.pdf?MOD=AJPERES&CVID=nPMkceo
10 https://www.unepfi.org/fileadmin/documents/universal_ownership_full.pdf

  

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Resolution Details

Company:

The Travelers Companies, Inc.

Year:

2023

Issue Area:

Environment, Inclusiveness

Focus Area:

Environmental Justice, Racial Justice, Workplace Equity

Status:

Vote

Vote Percentage:

35.31%

Resolution Text

Resolved: Shareholders urge the board of directors to oversee a third-party audit (within a reasonable time and cost, and consistent with the law) which assesses and produces recommendations for improving the racial impacts of its policies, practices, products, and services. Input from stakeholders, including civil rights organizations, employees, and customers, should be considered in determining the specific matters to be assessed. A report on the audit, prepared at reasonable cost and omitting confidential/proprietary information, should be published on the company’s website. 

Travelers CEO Alan Schnitzer signed the Partnership for New York City pledge in June 2020, which reads 
“we are reasserting our commitments to diversity and inclusion among our boards, executive leadership, and our entire workforce” and “we commit to help address conditions” that lead to racial injustice.1 However, we believe Travelers’ policies and practices fall short of delivering on this pledge.  

Travelers reports having made changes to its succession planning and talent management to identify people of color (POC) for hiring and promotion in 2020. Despite ranking 6th by premiums written out of 27 companies, Travelers ranked 20th in workforce race and ethnic diversity in 2021 according to the U.S. House Committee on Financial Services report on diversity and inclusion in America’s largest insurance companies.2 The report also concluded Black or African American employees are overrepresented in lower-level positions and underrepresented at higher-level positions, which is true at Travelers. Black people represent just 3 percent of senior leadership, but 18 percent of administrative support according to its 2021 EEO-1 data. Additionally, Travelers has the lowest percentage of POC on boards compared to industry peers at 9.1 percent. The insurance industry average is 22.3 percent and within the top ten insurers, Travelers ranks last.3 Without transparent, public targets, it is unclear how Travelers will address the lack of diversity in its workforce. 

The company may also face future legal risk. In 2018, Travelers settled a National Fair Housing Alliance lawsuit alleging it denied insurance to landlords renting to Section 8 voucher recipients, who are predominantly Black women.4 In 2020, Travelers privately settled with a Black construction vendor who filed complaints against seventeen insurance companies for refusing to contract with minority vendors.5 We believe it is necessary to identify and remedy potential gaps between Travelers’ non-discriminatory business practice policy and actual outcomes.  

Additionally, Travelers’ policies are implicated in an environmental justice controversy. Since 2020, Indigenous groups have asked the company to avoid insuring any oil and gas development in the Arctic National Wildlife Refuge, which is opposed by the Gwich’in people that live there.6 Several banks and insurance companies have already made such commitments, but Travelers has yet to join the growing list.7 

We urge the company to conduct a full racial equity audit to examine its total impact and help dismantle systemic racism.   

1 https://pfnyc.org/news/open-letter-from-leaders-of-the-partnership-for-new-york-city/  2 https://financialservices.house.gov/uploadedfiles/d.i_insurance_report_092022.pdf  
3 https://financialservices.house.gov/uploadedfiles/d.i_insurance_report_092022.pdf  
4 https://nationalfairhousing.org/2018/02/23/travelers/  
5 https://www.nytimes.com/2020/12/29/business/black-homeowners-insurance-claim.html 6 https://ourarcticrefuge.org/letter-to-insurance-companies/  
7 https://ourarcticrefuge.org/corporate-commitment-to-protect-the-arctic-refuge/  

  

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Resolution Details

Company:

Restaurant Brands International

Year:

2023

Issue Area:

Human Rights & Worker Rights

Focus Area:

Human Rights

Status:

Vote

Vote Percentage:

15.70%

Resolution Text

Resolved: That shareholders of Restaurant Brands International (“RBI”) ask the board of directors to analyze and report on how its business strategy will be resilient in the face of increasing labour market pressure while sustaining shareholders’ financial return and long-term value. The report should, at minimum, (1) explain how the Company’s strategy, programs and incentives enable franchisees to adopt competitive employment standards, including wages and benefits and (2) demonstrate the effectiveness of its strategy through the disclosure of aggregated human capital performance indicators and information.

Supporting Statement: Canada and America’s labour-force participation rates have been particularly low in the past couple of years. In 2022, national statistics agencies recorded a high number of job vacancies – in November, that number reached 10.5 million in the U.S. and reached almost 1 million in November in Canada. Research shows that “quits” are at a record high as workers have more confidence in their job prospects and transition from unemployment to employment has been particularly low.

A study from the bank RBC anticipates “labour shortages to become even more extensive” in the future. However, experts say that employment conditions, including low wages and benefits, are key factors driving the increase of job vacancies. A report from Mercer reveals that “frontline workers, low wage, minority and lower-level employees are more likely to be looking to leave – at rates significantly higher than historical norms”.

Accommodation and food services are the sectors recording the largest increase of job openings. This trend is particularly concerning as the average turnover rate in the fast food industry has reached 150% in the U.S. The retention challenges the sector faces may adversely impact customer satisfaction, operational efficiency and restaurant profitability. Research indicates a high employee turnover rate may increase labour expenses as “it can cost an employer approximately one-third the amount of an employee’s yearly earnings just to replace a lost worker”.

RBI has a recruitment and retention problem. Company emails leaked to the press in November 2021 revealed that several Tim Hortons restaurants are facing a “hiring crisis”.

Jose Cil, CEO of the Company acknowledged that attracting and retaining great talent for its restaurants represent a “big priority for […] franchisees all around North America”. However, in contrast with many employers that decided to improve wages and benefits to attract and retain a skilled workforce, RBI has not explained how its business strategy enables franchisors to compete effectively in a constricted labour market.

Franchisors’ inability to establish competitive working conditions and successfully attract and retain an operational workforce may threaten their ability to achieve their productivity goals and financial objectives, and negatively impact shareholders’ long-term value. Therefore, it is critical for shareholders to understand how RBI intends to support franchisors – which operate 95% of the Company’s branded operations – in navigating the uncertainties of the shifting labour market through the adoption of competitive employment standards, including wages and benefits.

  

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Resolution Details

Company:

Alphabet, Inc.

Year:

2023

Issue Area:

Corporate Governance, Human Rights & Worker Rights

Focus Area:

Children, Freedom of Expression / Internet, Risk Management

Status:

Vote

Vote Percentage:

0.60%

Resolution Text

Whereas, YouTube and parent company Alphabet have faced numerous problems associated with its content moderation and platform design, including the site being a central repository for and viral propagator of conspiracy theories, propaganda, fake news, extremist, and hateful content and facilitating the sexual exploitation of women and children and other crimes impacting the most vulnerable, including trafficking, sextortion and harassment;

Despite tremendous effort and leadership at YouTube, the platform remains an important part of the Child Sexual Abuse Exploitation Ecosystem, by being a place of contact for grooming and coercion, livestreaming and housing CSA material. For example, in Tanzania, total online child sexual exploitation and abuse-related offences on YouTube increased by 50% in two years between 2017 and 20191 and in Thailand, of the 43 children who were most recently offered money or gifts in return for sexual images or videos, ages 12-17, 60% reported YouTube as the platform it occurred on,2 (in Kenya it was 24%3 and Uganda was 12%4);

Traffickers in certain industries used YouTube to recruit and interact with those eventually trafficked;5

While YouTube has dramatically reduced online extremist content and disinformation and the largely unmoderated platforms BitChute and Odysee have rapidly become amplification chambers for disinformation, hateful content and incendiary and violent material; popular channels including those of Mike Cernovich and Andrew Tate continue to monetize their content on their YouTube Channels6, even while continually flagged for hateful content, disinformation and incitement of violence;”

An American Defamation League survey, “Online Hate and Harassment: The American Experience 2021,” found 21% of those who experienced online harassment or hate reported that at least some of that harassment occurred on YouTube;

The White House has recently convened a Listening Session on Tech Platform Accountability, announcing core principles forthcoming;7

The US State Department recently announced the Roadmap for the Global Partnership for Action on Gender-based Online Harassment and Abuse;8

Standing international law governing digital platforms, which balances harm reduction and rights protection exists in the European Union’s Digital Services Act and Australia’s Online Safety Act of 2021;

Online safety legislation is emerging domestically and internationally including the California Age-Appropriate Design Code Act, the United Kingdom Parliament’s introduction the Online Safety Bill, and the US bicameral Congressional introduction of the Digital Platform Commission Act of 2022;

Failure to adequately prepare for the implementation of legislation will have a material financial impact on the Company through regulatory fines and penalties;

Be it Resolved: Shareholders request that Alphabet issue a report at reasonable cost and omitting proprietary information, disclosing whether and how the Company intends to minimize legislative risk by aligning YouTube policies and procedures worldwide with the most comprehensive and rigorous online safety regulations, such as the European Union’s Digital Service Act9 and the UK Online Safety Bill10.

1 https://www.end-violence.org/sites/default/files/2022-03/DH_Tanzania_ONLINE_final_revise%20020322.pdf

2 https://www.end-violence.org/sites/default/files/2022-02/DH_Thailand_ONLINE_final.pdf

3 https://www.end-violence.org/sites/default/files/2021-10/DH%20Kenya%20Report.pdf

4 https://www.end-violence.org/sites/default/files/2021-11/DH_Uganda_ONLINE_final%20Report.pdf

5 https://polarisproject.org/wp-content/uploads/2018/08/A-Roadmap-for-Systems-and-Industries-to-Prevent-and- Disrupt-Human-Trafficking-Social-Media.pdf

6 https://bhr.stern.nyu.edu/youtube-report

7 https://www.whitehouse.gov/briefing-room/statements-releases/2022/09/08/readout-of-white-house-listening-session-on-tech-platform-accountability/?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axioslogin&stream=top

8 https://www.state.gov/2022-roadmap-for-the-global-partnership-for-action-on-gender-based-online- harassment-and-abuse/

9 https://digital-strategy.ec.europa.eu/en/policies/digital-services-act-package

10 https://bills.parliament.uk/bills/3137

  

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Resolution Details

Company:

United Parcel Service, Inc.

Year:

2023

Issue Area:

Corporate Governance

Focus Area:

Executive Compensation

Status:

Vote

Vote Percentage:

18.00%

Resolution Text

RESOLVED: Shareholders request the United Parcel Service (UPS or the Company) Board Compensation Committee prepare a report assessing the feasibility of integrating the UPS’ committed GHG emissions targets, goals, and other relevant sustainability measures, (as determined by the Board) into the performance goals, metrics, and vesting conditions applicable to senior executives under the UPS’ compensation incentive plans. GHG emissions targets are defined as those goals and targets disclosed by the company in its proxy statement and other public documents. Sustainability measures are defined as the environmental and related considerations, and related financial impacts, that are integrated into long term corporate strategy.

WHEREAS: UPS has announced a goal to achieve carbon neutrality in its operations by 2050 and a 50% reduction in emissions per small package delivered by 2035. However, UPS has not set a goal that covers its Scope 3 emissions, which represent 54% of its overall footprint. Additionally, shareholders do not know if UPS plans on achieving net zero through actual emissions reductions or through the purchase of carbon offsets.

We believe that alignment of a corporate climate transition strategy with executive compensation metrics and incentives can increase the likelihood of UPS achieving a timely climate transition. Achievement of a climate strategy that supports UPS’ overall corporate strategy helps to protect long-term shareholder value.

A review of UPS’ compensation structure for senior executives did not identify meaningful linkages between reducing GHG emissions and executive compensation. While compensation structures, especially for equity grants, are understandably linked primarily to shareholder returns, we believe these returns are impacted by the success of the Company in achieving its emissions targets and goals.

The achievement of the Company’s committed carbon reduction targets is intended as an integral element of the success of overall corporate strategy. UPS has not committed to setting independently verified, science- based goals covering Scopes 1-3, which would provide shareholders with objective assurance that UPS is strategically reducing emissions in a comprehensive and timely manner.

Peer DHL and 46 other air freight transportation and logistics companies have committed to setting targets via the Science-Based Targets Initiative (SBTi). Chevron Corp., Marathon Petroleum Corp., and other Scope 3- intensive companies in recent years have tied executive compensation to reductions in their GHG emissions.1

SUPPORTING STATEMENT: Examples of approaches to linkages between GHG emissions reductions targets and compensation structures that the board could consider include:

Design quantitative climate-related metrics with measurable payout or long-term incentive components

Adding a vesting requirement for a portion of performance equity grants that vest upon the achievement of interim GHG emissions targets

The interim targets would provide a pathway to the achievement of overall, longer-term targets

The interim period could align with typical equity grant vesting cycle

Adding a requirement for the achievement of one-year interim GHG emissions targets to the annual bonus plan

Adding similar short- or longer-term compensation goals to other, related, material ESG-related targets.

1 https://news.bloomberglaw.com/esg/executive-pay-tied-to-esg-goals-grows-as-investors-demand-action

  

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Resolution Details

Company:

Merck & Co., Inc.

Year:

2023

Issue Area:

Lobbying & Political Contributions

Focus Area:

Political Contributions

Status:

Vote

Vote Percentage:

7.30%

Resolution Text

Resolved, The shareholders of Merck & Co., Inc. (“Merck” or “Company”) ask the Company to adopt a policy requiring that any trade association, social welfare organization, or organization organized and operated primarily to engage in political activities that seeks financial support from Merck agree to report to , at least annually, the organization’s expenditures for political activities, including the amount spent and the recipient, and that each such report be posted on Merck’s website.

For purposes of this proposal, “political activities” are (i) influencing or attempting to influence the selection, nomination, election, or appointment of any individual to a public office; or (ii) supporting a party, committee, association, fund, or other organization organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures to engage in the activities described in (i). This proposal does not encompass lobbying spending.

Supporting Statement

As long-term Merck shareholders we support transparency and accountability in corporate electoral spending, including the indirect political spending that is the subject of this proposal. Misaligned or non- transparent funding creates reputational risk that can harm shareholder value. It can also place a company in legal jeopardy. Unless a company knows which candidates and political causes its funds ultimately support, it cannot assure shareholders, employees, or other stakeholders that its spending aligns with core values, business objectives, and policy positions. Without the information requested by this resolution, none of the board, senior management, or shareowners can assess the risks associated with political spending.

The risks are especially serious when giving to trade associations, Super PACs, 527 committees, and “social welfare” organizations – groups that routinely pass money to or spend on behalf of candidates and political causes that a company might not otherwise wish to support. The Conference Board’s 2021 “Under a Microscope” report details these risks, discusses how to effectively manage them, and recommends the process suggested in this proposal.

Media coverage amplifies the risk a company’s blind spending can pose and contributions to third-party groups can also embroil companies in scandal. Public records show Merck has contributed at least $1.3 million in corporate funds to third-party groups dating to the 2020 election cycle. Beneficiaries of this spending have been tied to attacks on voting rights, which we believe run counter to Merck’s stated values.

It is unclear whether the Company and its board received sufficient information from these groups to assess (a) the potential risks for Merck and stockholders, and (b) whether the groups’ expenditures aligned with Merck’s core values, business objectives, and policy positions.

Mandating reports from third-party groups receiving Merck’s political money would demonstrate the Company’s commitment to robust risk management and responsible civic engagement.

We urge a vote FOR the commonsense risk management measures contained in this proposal.

  

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