Strong votes behind proposals centered on racial equity, worker health and safety and environmental impacts send a “loud message” that investors will persist until their concerns are heard and addressed.
NEW YORK, NY, WEDNESDAY, JUNE 2nd, 2021 – Recently released vote results for eleven shareholder proposals that were on the proxy at Amazon’s 5/26 annual meeting indicate investor concern regarding Amazon’s environmental, social and governance (ESG) impacts is growing and will soon reach a tipping point.
Seven of the eleven proposals garnered votes in excess of 30% - an impressive showing particularly considering the large number of shares that are owned by Amazon’s founder, Jeff Bezos. When only independent shares are counted, results behind several proposals rise into the 40s, with one proposal achieving majority support.
While the themes cover a range of issues - from worker representation on the board of directors to calls for a civil rights audit and concerns around Amazon’s sales of facial recognition technology - taken together, investors say the proposals underscore how Amazon’s size, influence and governance structures expose it to significant human rights and environmental risks it is failing to address.
The proposals were filed by a diverse group of institutional investors including state pension funds, labor unions, asset management companies, family offices and faith-based organizations, many, but not all of which are members of ICCR. A majority of the resolutions were challenged by the company which sought, unsuccessfully to have them omitted from the proxy.
Several proposals called on Amazon to address racial inequities inherent in the company’s workforce, business model and portfolio of products. The proposal filed by the NY State Common Retirement Fund led by Comptroller Thomas DiNapoli which called for a diversity and equity audit report achieved the highest outcome with 44% of total shareholders and 55% of independent shareholders voting in favor.
“Shareholders sent a loud message to Amazon that they want the company to do more to address racial diversity, equity and inclusion,” said DiNapoli. “It's time for Amazon to listen to its investors and take steps to address these issues. Amazon needs to ensure that it is effectively addressing inequality and protecting the company’s long-term success. The call for racial equity is not going away and neither are Amazon's shareholders. We will continue to press Amazon to take an independent look at how it is addressing racial justice and equity, just as other major corporations have done.”
Two proposals called out the civil rights threats posed by Amazon’s sales of facial recognition software. Proponents argue that face surveillance dramatically expands law enforcement’s power and threatens rights including privacy, freedom of expression, freedom of association and due process with the greatest threats for Black and Brown communities and other people historically and currently marginalized and targeted by policing.
“Amazon’s Ring, Rekognition, Neighbors App, AWS platform and other technologies enable widespread surveillance and increased policing of all people, and place Black and Brown communities at particular risk,” said Mary Beth Gallagher, Executive Director of Investor Advocates for Social Justice on behalf of the proponents of a proposal asking for a report on customer due diligence which received 35% support. “Amazon must communicate to its shareholders and stakeholders how it ensures its customers aren’t negatively impacting the privacy and human rights of communities, and if it cannot do that, it must stop selling these dangerous technologies.”
“Last week’s vote confirms that Amazon needs to take aggressive steps to address investor concerns about its facial recognition technology, Rekognition,” said Michael Connor, Executive Director of Open MIC in relation to another proposal asking for a report on customer use of certain technologies that over 34% of shareholders supported. “Amazon’s current moratorium on police use of Rekognition isn’t sufficient. At the very least, Amazon must now broaden the scope of the moratorium to bar the use of Rekognition not only by police but also by ANY government agency or ANY law enforcement... ANYWHERE in the world.”
Several proposals reflected long-standing concerns about how Amazon treats its workers in light of the company’s reputation for unreasonable productivity pressures leading to work-related injuries including a proposal calling for hourly Amazon associates to be appointed to the board of directors. “Having an hourly employee on Amazon’s board of directors would be transformative,” said Gina Cummings, VP of Advocacy, Alliances & Policy at Oxfam America. “With mounting public criticism of the company’s mistreatment of workers it would demonstrate that Amazon values worker voice at the top levels of leadership and brings critical perspective to the company’s primarily white male board. A vote of nearly 22% signals real progress for this relatively new concept, one that’s proven in other countries to contribute to long-term corporate sustainability and significantly boost value for investors.”
“It’s time for Amazon to start walking its own talk on higher pay and better benefits,” said Natasha Lamb of Arjuna Capital which filed aproposal requesting a report on the gender and racial pay gap that achieved nearly 30% support. “If Amazon is truly committed to diversity, higher wages, strong benefits and a fair workplace then the data will bear that out. If the data does not bear that out, then it’s clear the company needs to do more to address structural racism and sexism—and investors will have a yardstick to measure progress.”
As the largest retailer shipping to the furthest corners of the world, Amazon has an enormous environmental footprint. While the company does not disclose how much plastic packaging it uses, it is believed to be one of the largest corporate users of flexible plastic packaging, which cannot be recycled. A recent report estimated that Amazon generated 465 million pounds of plastic packaging waste last year and that up to 22 million pounds of its plastic packaging waste entered the world’s marine ecosystems. Meanwhile, Amazon has no goal to make all of its packaging recyclable.
“We are pleased that more than one-third of shares voted supported our request for basic disclosure of plastic generation and waste data at Amazon, an especially encouraging result for a first-year proposal,” said Conrad MacKerron, Senior Vice President of As You Sow. “A central reason we filed the proposal was the company’s unwillingness to sit down and talk with us. We hope this strong vote result leads to a good faith dialogue with the company on the scope of its plastic use and how it can move to recycle the majority of its plastic waste in the short term and reduce overall plastic use in the long term.”
There were a number of proposals citing risks posed by Amazon’s governance policies and practices including a request to separate the board chair and CEO roles, a request to amend the threshold necessary for shareholders to call a special meeting, a request for enhanced lobbying disclosure and a call for a report on the risks associated with Amazon’s anti-competitive practices.
“Jeff Bezos announced earlier this year that he will be stepping down as CEO but that he intends to remain Executive Chairman. As founder of Amazon, Bezos could not be independent,” said Marcela Pinilla, Director, Sustainable Investing, Zevin Asset Management which filed the proposal for an independent chair. “A truly independent board chair would bring fresh eyes to board oversight and question ideas that could harm long-term value creation. To paraphrase a basic governance tenet: We don’t let students grade their own exams, so why let a former CEO and founder land in the Executive Chairman seat?”
“This is a strong vote for a first-time resolution that the company forcefully challenged, a result that affirms that our concern over a lack of effective oversight of anti-trust risk management is shared by our fellow shareholders,” said Richard Clayton, Research Director for CtW Investment Group which filed the proposal on anti-competitive practices that garnered nearly 34% support. “As recent events – such as the DC AG’s lawsuit – make clear, the risk to the company’s operations and reputation are only growing, and shareholders demonstrated that they want to know from the board directly how it oversees the company’s management of those risks.”
The vote outcomes for the full group of shareholder proposals can be found at this link.
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.