2024 | Interfaith Center on Corporate Responsibility

Resolution Details

Company:

Fox Corporation

Year:

2024

Issue Area:

Human Rights & Worker Rights

Focus Area:

Misinformation/Disinformation

Status:

Challenged

Resolution Text

WHEREAS: he ongoing perception by Fox News viewers, that non-news shows are actual journalism, poses significant risks to Fox Corp. and to U.S. democracy. Last year, Fox settled a lawsuit with Dominion Voting Systems for $787.5 million because of statements made on Fox News alleging illegitimacy of the 2020 election results due to Dominion’s systems.[1] The settlement came after a court rejected Fox’s legal defense that the statements about Dominion were “pure opinion.” The Court found instead that the statements “were made by newscasters holding themselves out to be sources of accurate information.”[2] The 2023 Dominion lawsuit highlights the risk of a news organization inadequately differentiating its news reporting from its opinion and entertainment programming.

Failure to differentiate between journalism and opinion also poses a clear threat to an informed electorate and a thriving American democracy. Studies show that Fox viewers are more likely to be misinformed about issues including elections and the integrity of voting systems, COVID-19, climate change, and other issues.[3] Typically, it is Fox’s opinion shows that are identified as the basis for the misinformation.[4]

Blurred lines between opinion and journalism also introduce significant business risk from potential reputational damage. Twenty-one percent of Fox News viewers said they trusted the network less in light of evidence revealed by the Dominion lawsuit.[5]

A clear differentiation between Fox’s opinion and news shows can mitigate ongoing risks to the Company, shareholders, and its audience without limiting the free speech of hosts or the programming that Fox News provides.

BE IT RESOLVED: Shareholders request that the Fox Corporation Board prepare and publish a report, excluding confidential information, assessing the potential negative social impact and risks to the Company from continuing to inadequately distinguish between Fox’s on-air news content and its opinion content, and the viability and benefits of providing public differentiation between its news and the entertainment-based nature of its non-news shows.

SUPPORTING STATEMENT: Shareholders request that the report include:

Analysis of risk mitigation from a third-party expert that includes legal, financial, and reputational risk;

Identification of likely strategies that increase the distinction between news and opinion content, such as replacing the on-screen “Fox News” branding during opinion shows to highlight opinion-content.

Third-party testing of methods that communicate opinion content to independent viewers (such as the example of branding differentiation, provided below).

* On-screen logo may be used to clarify content and reduce litigation risk

[1] https://www.cnn.com/2023/04/18/media/fox-dominion-settlement/index.html

[2] https://www.cnn.com/2023/03/31/media/fox-news-dominion-lawsuit/index.html

[3] https://www.prri.org/research/competing-visions-of-america-an-evolving-identity-or-a-culture-under-attack/; https://www.kff.org/coronavirus-covid-19/press-release/covid-19-misinformation-is-ubiquitous-78-of-the-public-believes-or-is-unsure-about-at-least-one-false-statement-and-nearly-at-third-believe-at-least-four-of-eight-false-statements-tested/; https://www.independent.co.uk/climate-change/news/misinformation-denial-fox-news-media-b2225682.html

[4] https://www.washingtonpost.com/news/monkey-cage/wp/2018/11/06/blame-fox-not-facebook-for-fake-news/; https://www.salon.com/2020/07/17/fox-news-peddled-misinformation-about-the-coronavirus-253-times-in-five-days-study/

[5] https://variety.com/2023/tv/news/fox-news-dominion-lawsuit-viewers-less-trust-1235554399/

Resolution Details

Company:

Amazon.com, Inc

Year:

2024

Issue Area:

Climate Change

Focus Area:

Just Transition

Status:

On Proxy

Resolution Text

RESOLVED: Shareholders request the Board of Directors prepare a report disclosing how Amazon.com, Inc., (“Amazon” or the “Company”) is addressing the impact of its climate change strategy on relevant stakeholders, including but not limited to employees, workers in its supply chain, and communities in which it operates, consistent with the “Just Transition” guidelines of the International Labor Organization and indicators of the World Benchmarking Alliance. The report should be prepared at reasonable cost, omit proprietary information, and be available to investors.

SUPPORTING STATEMENT: At the 2021 UN Climate Change Conference, the United States and other governments agreed to the Just Transition Declaration, which aligns with the “Just Transition” guidelines in the International Labor Organization’s Guidelines for a just transition towards environmentally sustainable economies and societies for all. The latter states that an environmentally sustainable future requires “anticipating impacts on employment, adequate and sustainable social protection for job losses and displacement, skills development and social dialogue.” (https://www.ilo.org/wcmsp5/groups/public/@ed_emp/ @emp_ent/documents/publication/wcms_432859.pdf.) Those guidelines emphasize the “pivotal role” of employers “in bringing about social, economic and environmental sustainability with decent work and social inclusion.”

The World Benchmarking Alliance’s indicators include discrete, time-based indicators, including those tied to developing a just transition plan through consultation with affected stakeholders; mitigating the negative social impacts of the carbon transition on workers and communities; establishing a clear process for identifying job dislocation risks for workers and communities; and developing plans to retain and reskill workers for an inclusive workforce. (See https://assets.worldbenchmarkingalliance.org/app/uploads/2021/07/Just-Transition-Methodology.pdf.)

Amazon has pledged to reach net-zero carbon emissions by 2040, a goal that suggests dramatic transformations in the way Amazon operates its vast transportation and logistical networks, bringing with it significant changes to the Company’s human capital needs. We believe it is crucial Amazon develop its decarbonization strategy with a systematic focus on ensuring a just and equitable energy transition. A 2022 study by the World Benchmarking Alliance found that the largest transportation companies—many of which approximate Amazon’s own transportation network—were ill-prepared to manage the social impacts of decarbonizing, placing millions of workers at risk. (See https://www.worldbenchmarkingalliance.org/publication/ transport/.)

A key area of uncertainty for investors is how some of Amazon’s technological solutions to the climate crisis, such as its investments in electric and autonomous vehicles, impact jobs and communities, including those along its supply chains and transportation networks. A just transition report would help investors better understand the interplay of these technologies, the Company’s climate commitments, and its human capital management practices as well as its broader stakeholder relationships. As one of the largest private employers in the world, with extensive logistical operations, Amazon has a key role in supporting social fairness as the world attempts to decarbonize.

Resolution Details

Company:

Enbridge Inc.

Year:

2024

Issue Area:

Climate Change

Focus Area:

GHG Reduction and Targets

Status:

Vote

Vote Percentage:

27.60%

Enbridge Inc. Disclose Scope 3 Emissions – Proxy Memo

Enbridge Scope 3 Investor brief.pdf

Resolution Text

Resolved: Shareholders request that Enbridge annually disclose all of its material scope 3 emissions using accepted definitions and in absolute terms.

Supporting Statement:

Enbridge’s current scope 3 emissions disclosure methodology runs counter to guidance by the CDP,1 the GHG Protocol,2 and investor-led Climate Engagement Canada,3 leading to a large under-reporting of scope 3 emissions and by extension its transition risk.

Enbridge’s scope 3 reporting is incomplete because excludes downstream emissions for use of goods and services, so called “category 11 emissions,” from its midstream business. While Enbridge reports some category 11 emissions from its gas utility business, it does not report the category 11 emissions associated with midstream business services –transportation and storage of oil and gas.

These emissions are material to Enbridge because its business model relies on their release, and their exclusion therefore obscures risks associated with these emissions.

Moreover, as Enbridge expands its infrastructure such as gas pipelines or LNG terminals, the trend line for these scope 3 emissions is not properly measured and assessed for risk.

Enbridge claims either existing reporting methodological uncertainty, incomplete data, or double counting as reasons to not fully report its scope 3 emissions. Yet, the guidance is clear that Enbridge should report the material emissions from category 11 and other energy companies have overcome these challenges to report relevant scope 3 emissions.4

In 2020 Enbridge made a commitment “to expand the scope of our public disclosure of scope 3 emissions within the next 2-3 years.”5 This resolution presents an opportunity for investors to ensure Enbridge fulfills this commitment.

This is the second year this proposal has been submitted. Last year 24.4% voted in favour, with another 4% abstaining, for a total of 28.4% breaking with management.6 Despite this relatively high vote by Enbridge investors, the company is yet to improve its approach to the issue.

We respectfully request that shareholders vote for this proposal.

Section 3 “Industry and company structure” specifically states that the guidance document applies to midstream companies pg. 10 https://cdn.cdp.net/cdp-production/cms/guidance_docs/pdfs/000/000/469/original/CDP-Scope-3-Category11-Guidance-Oil-Gas.pdf
Provides guidance that the direct category 11 scope 3 emissions should be reported for “fuels and feedstocks” (e.g. petroleum products, natural gas, coal, biofuels, and crude oil) table 11.1 pg. 114 https://ghgprotocol.org/sites/default/files/standards/Scope3_Calculation_Guidance_0.pdf
CEC benchmark (Appendix A pg. 33) provides specific guidance that O&G distribution companies should report scope 3 “use of sold products” category 11 emissions https://climateengagement.ca/cec-net-zero-benchmark/
https://www.wri.org/update/trends-show-companies-are-ready-scope-3-reporting-us-climate-disclosure-rule
Enbridge 2020 CDP report Section C3.1d https://www.cdp.net/en/responses/5581?per_page=10&sort_by=project_year&sort_dir=desc
https://www.enbridge.com/~/media/Enb/Documents/Governance/ENB_20230504_Report_of_Voting_Results.pdf

Resolution Details

Company:

International Business Machines Corp. (IBM)

Year:

2024

Issue Area:

Climate Change

Focus Area:

GHG Reduction and Targets

Status:

On Proxy

International Business Machines Corp. (IBM) Adopt Short and Long-Term Science-Based GHG Reduction Targets – Proxy Exempt Solicitation

Resolution Text

Whereas: Climate change is creating systemic risks to the economy, and immediate, sharp emissions reduction is required of all market sectors and industries.[1] Publicly traded corporations both contribute emissions that augment climate change and are subject to multiple risks created by climate change. Lack of comprehensive efforts to curtail emissions threatens investor value, particularly for diversified holders, for whom climate change poses an undiversifiable and unhedgeable risk.[2]

In response to this systemic risk, more than 6,000 companies, representing a broad range of industries, have set or committed to set science-based greenhouse gas reduction targets covering their Scopes 1 – 3 emissions aligned with a 1.5 degrees Celsius scenario with the Science Based Targets initiative (SBTi). SBTi provides third-party validation of corporate targets.

IBM has declined to set comparably comprehensive targets or seek third-party validation for its existing targets, raising concerns about the credibility of its commitments. Rather, it has adopted a 2030 net zero target narrowly focused on its operational emissions and a single category of Scope 3 emissions. Of the emissions IBM discloses for 2022, its target covers only half of its carbon footprint.

Meanwhile, Company peers Accenture, Microsoft, Hewlett Packard Enterprise, Salesforce, and SAP have set or committed to set near-term science-based 1.5 degree Celsius-aligned targets with SBTi inclusive of their full Scopes 1 – 3 emissions. Additionally, Accenture, Hewlett Packard Enterprise, and Microsoft, have committed to set ambitious long-term 1.5 degree Celsius-aligned net-zero by 2050 targets, vetted by SBTi.

IBM’s opposition to setting a third party verified by a third party creates business and reputational risks. For example, the Company markets and sells end-to-end sustainability solutions including cloud-based software, Envizi ESG Suite, which helps customers calculate and report Scope 3 emissions, and it notes in a Wall Street Journal ad that, “Companies need tools that can help them do detailed carbon accounting…”[3]

However, in its recent CDP climate report, IBM chooses not to disclose a number of Scope 3 emissions categories indicating that there is no reliable data for reporting the emissions, controverting its stated capabilities of providing detailed carbon accounting. Further, IBM describes Envizi as valuable for customers reporting greenhouse gas emissions data to CDP, or who have committed to the SBTi. Regrettably, IBM disparages SBTi in its 2022 CDP climate report as “a self-appointed arbiter for judging a company’s goals,” undermining the value of its own services.

Resolved: Shareholders request that IBM adopt independently verified short-, medium- and long-term science-based greenhouse gas emissions reduction targets, inclusive of emissions from its full value chain, in order to achieve net zero emissions by 2050 in line with the Paris Agreement’s goal of limiting global temperature rise to 1.5 degrees Celsius.

[1]https://report.ipcc.ch/ar6wg3/pdf/IPCC_AR6_WGIII_FinalDraft_FullReport.pdf

[2]https://www.unepfi.org/fileadmin/documents/universal_ownership_full.pdf. Pg4.

[3] https://partners.wsj.com/ibm/tackling-tough-business-challenges-together/making-sustainability-goals-achievable-with-the-help-of-data/

Resolution Details

Company:

The Chemours Company

Year:

2024

Issue Area:

Environment

Focus Area:

Mining

Status:

Omitted

Resolution Text

WHEREAS: Mining next to ecologically sensitive protected areas poses material climate, regulatory, and reputational risks.

At 438,000 acres, the Okefenokee Swamp is one of the world’s largest freshwater wetlands. Over 402,000 acres are protected in the Okefenokee National Wildlife Refuge, the largest refuge in the eastern United States and home to hundreds of plant and animal species. The Okefenokee also stores over 400M tons of CO2 equivalent, making it one of the largest natural carbon sinks in North America.

Twin Pines Minerals, LLC (TPM) has applied for permits to mine titanium on Trail Ridge, the swamp’s eastern hydrologic boundary. In 2022, Chemours stated its lack of plans for doing business with TPM or conducting mining on Trail Ridge itself, but left open future possibilities for both. Since then, TPM’s northern neighbor (with which Chemours, as DuPont, did business previously) has publicly called for mining on its land and TPM’s new western neighbor has leased its land to Chemours for titanium mining elsewhere in Georgia.

Mining, or purchasing materials mined, on Trail Ridge could expose Chemours to considerable financial risk:

· Climate and Biodiversity: Overwhelming scientific consensus emerged since Chemours’ 2022 commitment that TPM’s project would significantly damage the Okefenokee by drawing down its water level and increasing risk of drought and landscape-level fires. Such events would destroy swamp wildlife habitat, damage thousands of acres of adjacent private timberland and release significant carbon emissions. Involvement in titanium mining at the Okefenokee would conflict with Chemours’ December 20, 2023 Page 3 aspiration to reduce Scope 3 emissions while also exacerbating operational risks associated with climate change cited in its 2022 10-K.

· Regulatory and Legal: The 2023 Okefenokee Protection Act, which would prohibit mining on Trail Ridge, garnered 96 bipartisan cosponsors in Georgia’s House of Representatives and will return in 2024, presenting regulatory risk. Furthermore, potential litigation from timber companies suffering fire damage to their assets presents legal risk.

· Reputational: In early 2023, over 100,000 comments were submitted to Georgia’s Environmental Protection Division opposing TPM’s draft Mining Land Use Plan and approximately 70% of Georgians want Governor Kemp to deny TPM’s permits. Okefenokee is being nominated for inclusion on UNESCO’s World Heritage Site List, and the issue has received significant media coverage in the New York Times, Wall Street Journal, AP and Bloomberg.

Furthermore, Chemours’ agreement to purchase titanium from Hyperion in Tennessee, combined with expansion of its Florida operations, render unnecessary securing supply from Okefenokee.

A permanent commitment to protect the Okefenokee would enable Chemours to fortify its environmental image and help fulfill the aspiration articulated in its 2022 Sustainability Report “to be the most sustainable TiO2 enterprise in the world.”

RESOLVED: Shareholders request the Board of Directors issue a public report, within six months, assessing the benefits and drawbacks of permanently committing not to engage in titanium mining, nor to purchase titanium mined by others, on the Okefenokee’s hydrologic boundary, and assessing risks to the company associated with same.

Resolution Details

Company:

Sherwin-Williams Company

Year:

2024

Issue Area:

Climate Change

Focus Area:

Biodiversity, GHG Reduction and Targets

Status:

Omitted

Resolution Text

Whereas: Mining next to ecologically sensitive protected areas poses material climate, regulatory and reputational risks.

Twin Pines Minerals, LLC (TPM) has applied for permits to mine titanium on Trail Ridge, the swamp’s eastern hydrologic boundary, for production of titanium dioxide. TPM’s northern neighbor has publicly called for mining on its land and TPM’s new western neighbor has leased its land for titanium mining elsewhere in Georgia.

As Sherwin-Williams is a major carrier of titanium dioxide-based paint, links between the company’s paint products and titanium mined on Trail Ridge could expose the company to unnecessary risks:

Climate: Overwhelming scientific consensus states that TPM’s project would significantly damage the Okefenokee by drawing down its water level and increasing risk of drought and landscape-level fires. Such events would destroy wildlife habitat, damage thousands of acres of adjacent private timberland and release significant carbon emissions. Sherwin-Williams’ Scope 3 emissions could skyrocket in the event of a major peat fire, as the carbon stored in the Okefenokee is equivalent to over 1,200 percent of the Company’s 2022 Scope 3 emissions. Any link to mining at the Okefenokee would conflict with Sherwin-Williams’ efforts to leverage its ‘Sustainability by Design’ program to reduce Scope 3 emissions and mitigate environmental risks, all while exacerbating the business performance risks associated with climate change.
Regulatory and Legal: The 2023 Okefenokee Protection Act, which would prohibit mining on Trail Ridge, garnered 96 bipartisan cosponsors in Georgia’s House of Representatives and will return in 2024, presenting regulatory risk. Furthermore, organizations with a history of litigating to protect natural resources have publicly criticized the project, and potential litigation from timber companies suffering fire damage to their assets presents additional legal risk.
Reputational: In early 2023, over 100,000 comments were submitted to Georgia’s Environmental Protection Division opposing TPM’s draft Mining Land Use Plan and approximately 70% of Georgians want Governor Kemp to deny TPM’s permits. Okefenokee is being nominated for inclusion on UNESCO’s World Heritage Site List, and the issue has received significant media coverage in the New York Times, Wall Street Journal, AP and Bloomberg.

A commitment to avoid sourcing titanium dioxide from the Okefenokee would help Sherwin-Williams realize the aspiration in its 2022 Sustainability Report to “maintain a supply chain in which continuous improvement and sustainability principles are at the forefront.”

Resolved: Shareholders request the Board of Directors issue a public report, within six months, assessing the benefits and drawbacks of permanently committing not to sell paint containing titanium dioxide sourced from the Okefenokee, and assessing risks to the company associated with same.

Resolution Details

Company:

Home Depot, Inc.

Year:

2024

Issue Area:

Climate Change

Focus Area:

Biodiversity, GHG Reduction and Targets

Status:

Challenged

Resolution Text

Whereas: Mining next to ecologically sensitive protected areas poses material climate, regulatory and reputational risks.

As Home Depot is a major carrier of titanium dioxide-based paint, links between the company’s paint products and titanium mined on Trail Ridge could expose the company to unnecessary risks:

Climate: Overwhelming scientific consensus states that TPM’s project would significantly damage the Okefenokee by drawing down its water level and increasing risk of drought and landscape-level fires. Such events would destroy wildlife habitat, damage thousands of acres of timberland and release significant carbon emissions. Home Depot’s greenhouse gas emissions could skyrocket in the event of a major peat fire, as the carbon stored in the Okefenokee is over 100 times greater than the Company’s 2022 Scope 3 emissions. Any link to mining at the Okefenokee would conflict with Home Depot’s efforts to reduce emissions and mitigate climate risk, all while exacerbating the business performance risks associated with climate change.
Regulatory and Legal: The 2023 Okefenokee Protection Act, which would prohibit mining on Trail Ridge, garnered 96 bipartisan cosponsors in Georgia’s House of Representatives and will return in 2024, presenting regulatory risk. Furthermore, organizations with a history of litigating to protect natural resources have publicly criticized the project, and potential litigation from timber companies suffering fire damage to their assets presents additional legal risk.
Reputational: In early 2023, over 100,000 comments were submitted to Georgia’s Environmental Protection Division opposing TPM’s draft Mining Land Use Plan and approximately 70% of Georgians want Governor Kemp to deny TPM’s permits. Okefenokee is being nominated for inclusion on UNESCO’s World Heritage Site List, and the issue has received significant media coverage in the New York Times, Wall Street Journal, AP and Bloomberg.

A commitment to avoid sourcing titanium dioxide from the Okefenokee would help Home Depot more fully operationalize the conviction articulated in its 2023 ESG report, “when we invest in running a responsible, sustainable company, we make our business stronger, more agile, and more resilient.”

Resolved: Shareholders request the Board of Directors issue a public report, within a reasonable time, assessing the benefits and drawbacks of permanently committing not to sell paint containing titanium dioxide sourced from the Okefenokee, and assessing risks to the company associated with same.

Resolution Details

Company:

Canadian National Railway

Year:

2024

Issue Area:

Human Rights & Worker Rights

Focus Area:

Paid Sick leave

Status:

Filed

Resolution Text

RESOLVED: Shareholders ask the Board of Directors to negotiate paid sick leave policies with all unions representing Canadian National Railway’s U.S. workforce. These polices should ensure that all CN employees are able to utilize paid sick leave benefits without being subject to discipline under CN’s employee attendance policies.

SUPPORTING STATEMENT: One out of five people working in the United States have no access to earned sick time, or “paid sick leave”, for short-term illness, health needs and preventive care.1 They often face an impossible choice when they are sick: stay at home and risk their economic security or go to work and risk their coworkers’ and the public’s health. CN has significantly lagged all but one other Class I railroad in the amount of paid sick leave agreements it has negotiated with unions representing its U.S. workforce since the last round of national bargaining concluded.

As the COVID-19 pandemic has shown, paid sick leave is a crucial component of public health by allowing sick workers who are contagious to isolate themselves from their coworkers and the public. One study found a 56% reduction in COVID-19 cases as the result of temporary federally mandated COVID-19 paid sick leave in states that did not previously have paid sick leave.2 State and local paid sick leave laws have also been shown to reduce influenza-like illness infections without causing negative effects on employment or wages.3

Under the Railroad Unemployment Insurance Act, railroad employees are only entitled to sickness benefits after seven days of illness.4 Railroad employees and their unions have expressed concern that these benefits are inadequate, and that employees risk discipline if they need to take unscheduled time off due to sickness.5 Workers’ concerns about the need for paid sick leave have been exacerbated by the railroad industry’s adoption of “precision scheduled railroading” that has reduced railroad carrier staffing levels by 30 percent since 2015.6 In 2022, members of various railway unions rejected tentative agreements that did not contain employer provided paid sick leave benefits.7 According to the Association of American Railroads, a nationwide rail shutdown due to a labor dispute could cost the U.S. economy more than $2 billion a day.8

As a result of legislation passed in Canada in 2022, all of Canada’s federally regulated employees, including CN’s Canadian employees, get up to 10 days of paid sick leave a year. The implementation of this requirement in Canada has created a disparity where CN’s Canadian workforce has immediate paid sick leave, but its U.S. based workforce is only entitled to sickness benefits after seven days of illness. That disparity does not make sense from a financial or operational perspective.

We believe negotiating comprehensive and permanent paid sick leave policies with all unions representing CN’s U.S. workforce would help make the future operating environment more equitable and mitigate reputational, financial, and regulatory risk to Canadian National Railway.

1 https://www.bls.gov/ncs/ebs/benefits/2021/employee-benefits-in-the-united-states-march-2021.pdf

2 https://www.healthaffairs.org/doi/10.1377/hlthaff.2020.00863

3 https://voxeu.org/article/pros-and-cons-sick-pay

4 https://rrb.gov/Benefits/UB9

5 https://www.nytimes.com/2022/10/28/business/railroad-workers-strike-threat.html

6 https://www.nytimes.com/2022/09/15/business/economy/railroad-workers-strike.html

7 https://www.npr.org/2022/11/17/1136459343/railroads-rail-workers-strike-negotiations-labor-union

8 https://www.aar.org/wp-content/uploads/2022/09/AAR-Rail-Shutdown-Report-September-2022.pdf

Resolution Details

Company:

Exxon Mobil Corporation

Year:

2024

Issue Area:

Inclusiveness

Focus Area:

Equal Employment Opportunity (EEO)

Status:

Filed

Resolution Text

WHEREAS: Pay inequities persist across race and gender and pose substantial risks to companies and society. Black workers’ median annual earnings represent 77 percent of white wages. The median income for women working full time is 84 percent that of men. Intersecting race, Black women earn 76 percent and Latina women 63 percent.1 At the current rate, women will not reach pay equity until 2059, Black women in 2130, and Latina women in 2224.2

Citigroup estimates closing minority and gender wage gaps 20 years ago could have generated 12 trillion dollars in additional national income. PwC estimates closing the gender pay gap could boost Organization for Economic Cooperation and Development (OECD) countries’ economies by 2 trillion dollars annually.3

Actively managing pay equity is associated with improved representation. Diversity in leadership is linked to superior stock performance and return on equity.4 Minorities represent 64 percent of Exxon’s global workforce and 28 percent of executives. Women represent 34 percent of the global workforce and 27 percent of executives.5

Best practice pay equity reporting consists of two parts:

1. unadjusted median pay gaps, assessing equal opportunity to high paying roles,

2. statistically adjusted gaps, assessing whether minorities and non-minorities, men and women, are paid the same for similar roles.

Exxon Mobil does not report quantitative unadjusted or adjusted pay gaps. About 50 percent of the 100 largest U.S. employers currently report adjusted gaps, and an increasing number of companies disclose unadjusted gaps to address the structural bias women and minorities face regarding job opportunity and pay.6

Racial and gender unadjusted median pay gaps are accepted as the valid way of measuring pay inequity by the United States Census Bureau, Department of Labor, OECD, and International Labor Organization. The United Kingdom and Ireland mandate disclosure of median gender pay gaps.7 Exxon Mobil already provides this information for United Kingdom employees, and investors should be able to expect the same level of disclosure for all employers.

RESOLVED: Shareholders request Exxon Mobil report on both quantitative median and adjusted pay gaps across race and gender, including associated policy, reputational, competitive, and operational risks, and risks related to recruiting and retaining diverse talent. The report should be prepared at reasonable cost, omitting proprietary information, litigation strategy and legal compliance information.

Racial/gender pay gaps are defined as the difference between non-minority and minority/male and female median earnings expressed as a percentage of non-minority/male earnings (Wikipedia/OECD, respectively).

SUPPORTING STATEMENT: An annual report adequate for investors to assess performance could, with board discretion, integrate base, bonus and equity compensation to calculate:

· percentage median and adjusted gender pay gap, globally and/or by country, where appropriate

· percentage median and adjusted racial/minority/ethnicity pay gap, US and/or by country, where appropriate.

1 https://www.census.gov/data/tables/time-series/demo/income-poverty/cps-pinc/pinc-05.html – par_textimage_24

2 https://www.proxyimpact.com/_files/ugd/b07274_d88f00b8786f4bd8bcf27a0c4bb66e35.pdf

3 Ibid.

4 Ibid.

5 https://corporate.exxonmobil.com/-/media/global/files/sustainability/social/investing-in-people-old.pdf

6 https://diversiq.com/which-sp-500-companies-disclose-gender-pay-equity-data/

7 https://www.proxyimpact.com/_files/ugd/b07274_d88f00b8786f4bd8bcf27a0c4bb66e35.pdf

Resolution Details

Company:

RTX Corporation

Year:

2024

Issue Area:

Lobbying & Political Contributions

Focus Area:

Lobbying

Status:

Filed

Resolution Text

RESOLVED, shareowners of RTX request the preparation of a report, updated annually, disclosing:

1. Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.

2. Payments by RTX used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.

3. RTX’s membership in and payments to any tax-exempt organization that writes and endorses model legislation.

4. Description of management’s and the Board’s decision-making process and oversight for making payments described in sections 2 and 3 above.

For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which RTX is a member.

Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.

The report shall be presented to the Committee on Governance and Public Policy and posted on RTX’s website.

SUPPORTING STATEMENT

Full disclosure of RTX’s lobbying activities and expenditures is needed to assess whether RTX’s lobbying is consistent with its expressed goals and in shareowners’ best interests. RTX spent $37,680,000 from 2020 – 2022 on federal lobbying. This does not include state lobbying, where RTX also lobbies but disclosure is uneven or absent. RTX also lobbies abroad, spending between €200,000–299,000 on lobbying in Europe for 2022. RTX has drawn scrutiny for reportedly overbilling the government for employee time spent on lobbying and corporate activities.1

Companies can give unlimited amounts to third party groups that spend millions on lobbying and undisclosed grassroots activity.2 RTX fails to disclose its payments to trade associations and social welfare groups, or the amounts used for lobbying, to shareholders. RTX belongs to the Business Roundtable, National Association of Manufacturers (NAM) and US Chamber Commerce, which together have spent over $2.4 billion on federal lobbying since 1998.

RTX’s lack of disclosure presents reputational risks when its lobbying contradicts company public positions. For example, RTX supports addressing climate change, yet the Business Roundtable lobbied against the Inflation Reduction Act3 and the Chamber reportedly has been a “central actor” in dissuading climate legislation over a two-decade period.4 As RTX has drawn attention for paying lower taxes than most Americans,5 NAM has attracted attention for opposing a new corporate minimum tax.6 And while RTX does not belong to the controversial American Legislative Exchange Council, which is attacking “woke” investing,7 it is represented by the Chamber, which sits on its Private Enterprise Advisory Council.8

Reputational damage stemming from these misalignments could harm shareowner value. RTX should expand its lobbying disclosure.

1 https://tucson.com/news/local/business/tucson-mainstay-raytheon-loses-appeal-over-lobbying-costs/article_bb11ce30-8d44-11ed-a39c-a3a42ef0cd90.html.

2 https://theintercept.com/2019/08/06/business-group-spending-on-lobbying-in-washington-is-at-least-double-whats-publicly-reported/.

3 https://www.theguardian.com/environment/2022/aug/19/top-us-business-lobby-group-climate-action-business-roundtable.

4 https://www.washingtonpost.com/politics/2023/08/02/climate-group-pushes-big-tech-exit-nations-largest-business-lobby/.

5 https://www.kiplinger.com/slideshow/investing/t052-s001-10-companies-lower-tax-rates-than-most-americans/index.html.

6 https://www.nytimes.com/2023/09/07/business/corporate-minimum-tax-impact.html.

7 https://www.wbur.org/hereandnow/2023/03/22/esg-investing-fossil-fuels.

8 https://ohiocapitaljournal.com/2023/09/06/coming-soon-in-ohio-alec-releases-new-raft-of-model-legislation/.

Report on “News” vs. “Opinion” Risk

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