In May 2023, the National Association of Manufacturers (NAM) successfully filed a motion to intervene in a federal case brought by the anti-ESG group the National Center for Public Policy Research (NCPPR) against the Securities and Exchange Commission (SEC), challenging a shareholder resolution No Action determination. The NAM motion opened a broader challenge to the SEC’s authority to provide guidance regarding whether shareholder resolutions could be allowed on a company’s proxy for a vote, claiming that this process violates principles of corporate First Amendment rights enshrined in the Citizens United ruling.
Read morePrudent Climate Action by Shareholders is Legal and Necessary Despite Anti-ESG Rhetoric
Over the past decade, the investor community has worked with hundreds of companies, regulators and investment organizations to address climate change. Why? Because cutting emissions is a prudent and effective business management strategy that reduces a host of risks
Read moreSCOTUS Decision Could Scuttle Regulatory Agencies and Shareholder Rights
The modern administrative system was set up in recognition of the needs of a technologically developed society where the lives of citizens are affected by dozens and dozens of complex areas. From air pollution, to drugs, the internet, transportation, education, chemicals, railroads, airwaves, consumer protection, and health, agencies set the rules of the road for some of the most important areas of our lives.
Read moreA Funder's Journey to Shareholder Advocacy and Active Ownership
My first serious introduction to the concepts and practice of “active ownership” and proxy voting came in the early 2000s as the director of a newly created family foundation, the Singing Field Foundation. At that time, I joined the Environmental Grantmakers Association and began attending its conferences and those of other environmental funder affinity groups. Earlier, as a college student, I was on the periphery of the campaigns around university endowments and investments in South Africa. And, I have always felt that mission-driven organizations with invested assets should take great care that those investments not be in conflict with the mission.
Read moreDiverse Workforce Outperforms on Eight Key Financial Measures
Diversity, equity and inclusion (DEI) efforts look to ensure all employees, regardless of race or sex, get a fair shot. The recent Supreme Court decision to end affirmative action in college admissions does not affect companies’ abilities to run DEI programs – although it may impact their pipeline of incoming talent.
Read moreNew Standards Can Help Companies Avoid Carbon Offset Greenwashing
Shareholder scrutiny of corporate offsetting strategies is growing as the voluntary carbon market (VCM) grows, with projections it may be worth $50 billion annually by 2030. Carbon offset advocates believe the VCM incentivizes critical investments in mitigation and adaptation, even as global efforts fail to deliver on emission reduction targets. Yet companies can face reputational and litigation risks for participating in the VCM given credibility questions. Companies can reduce the risks associated with purchasing voluntary credits by aligning their strategies with best practices and procuring third-party verified high-quality credits.
Read moreInvestors Expect Science Based GHG Targets and Reporting
Shareholders in 2023 are tightly focused on resolutions asking companies to establish science-based greenhouse gas reduction targets that cover the full value chain of emissions—and to report on them. The science is clear that companies need to rapidly act to reduce emissions to limit global warming to a 1.5°C increase in warming.
Read moreCompanies Taking a Closer Look at How Racial Inequity Affects Their Workers, Customers and Shareholders
The third anniversary of the murder of George Floyd at the hands of the Minneapolis police officers is fast approaching. We are reminded of the work we began nearly three years ago by filing Racial Equity Audit (REA) shareholder proposals and how much work remains. The police killings of Black people across the U.S. continue to galvanize the movement for racial justice, and corporations continue to be held accountable socially and legally for their role in furthering the economic and political repression of nonwhite communities.
Read moreESG Triggers the Right
Republican politicians are placing ESG on the list of grievances and conspiracies they serve up to their base as they try to turn ESG into the next critical race theory (CRT). One activist who was instrumental in convincing the Republican base that CRT is an ominous threat to their existence is heavily involved in the anti-ESG effort.
Read moreShareholders and Local Communities Join to Demand Racial and Environmental Justice
Often, companies have no “business-case rationale” to listen to the communities negatively affected by their operations and no incentives to act. As shareholders, we have legal standing to engage the executives and boards of these public companies.
Read moreRecord Number of Proposals Address Threats to Reproductive Health Care
Investors working with Rhia Ventures filed a record 30 proposals this proxy season to advance comprehensive and reproductive health care, double the number from the 2022 proxy season. The subject matter of the proposals expanded from last year’s focus on risk mitigation and political spending misalignment to include a number of new areas of concern that have intensified since the U.S. Supreme Court overturned the constitutional right to abortion in June 2022.
Read more2023 Update on SEC Shareholder Proposal Rules and Guidelines
Recent efforts of the Securities and Exchange Commission (SEC) Staff to create a more objective and efficient process for handling shareholder proposals have borne fruit in 2023, resulting in a 30 percent reduction in company-filed challenges to shareholder proposals. Clearer guidelines from the Staff have made it possible for shareholders to draft more defensible proposals.
Read moreThe Anti-ESG Shareholder Proponents
Shareholder proponents who oppose most of the ideas supported by ESG investors have been around for a long time, but in the last two years they have filed many more proposals and a few new players have emerged.
Read moreMajority Votes on Deforestation Put Pressure on Industry Laggards
Shareholder concern about deforestation speaks for itself. Four majority votes on Green Century proposals in the last three years – Bunge, 99 percent; Bloomin’ Brands, 76 percent; Procter & Gamble, 67.6 percent; and Home Depot, 64.6 percent – build upon dozens of no-deforestation agreements that shareholders have won and have helped curb climate change and preserve endangered species around the world.
Read moreSecret Influence: Astroturfing Sways Public Policy
Lobbying by companies can provide governments with valuable insights and data for public policy making, yet only 8 percent of the world’s 1,000 largest companies report their spending on lobbying to investors.
Read moreNew Universal Proxy Rule Will Democratize Director Elections
In November 2021, the SEC adopted final rules that will require parties in a contested corporate director election to use universal proxy cards for shareholder meetings held after August 31, 2022. Under the new rules, both the company and any shareholder seeking to elect a slate of director candidates at a shareholder meeting will be required to use proxy cards that include the names of all director nominees presented for election at the meeting.
Read moreLawsuit Challenges SEC's Restrictive Shareholder Proposal Rules
In September 2020, the SEC under Chairman Jay Clayton issued amendments to Rule 14a-8 that substantially restrict shareholders’ access to the corporate proxy statement. The Clayton SEC’s actions came in the context of years of lobbying by major trade associations like the Business Roundtable, the U.S. Chamber of Commerce, and the National Association of Manufacturers to limit shareholders’ ability to effectively engage with the companies they own on critical environmental, social, and governance issues.
Read moreThe Promise of Retail Shareholder Power
Voting is integral to the democratic process. During the 2020 U.S. Presidential election, it felt as though you could hardly go a day without hearing a celebrity or politician urging the public to vote.
Read moreCost Externalization: A Bad Trade for Diversified Shareholders
The Shareholder Commons has filed or otherwise supported 19 shareholder proposals in 2022 that focus on systematic risks, including mis/disinformation, climate change, and antimicrobial resistance. The common thread running through these proposals is how a company’s externalized costs affect shareholders by reducing the value of other assets in their portfolios.
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