2023 ESG Proxy Vote Alerts

Fossil Fuel Financing - Paid Sick Leave - Child Labor 

WELCOME TO WEEK 3 OF PROXY PREVIEW’S ESG PROXY VOTE ALERTS.

Insurance is used to compensate us from future problems, and nothing can be more important than personal health and safety. And yet …….

Some 80 million children aged 5 to 17 are working - many in dangerous conditions at risk of death, injury, illness and psychological trauma. What is this multi-billion dollar company doing to eliminate child labor in its supply chain?

Fossil Fuel Underwriting Risks  

Questions about risk calculations are the core business of insurance companies and financiers.  Investors have been asking increasingly pointed questions about the assessment of climate change-related risks and their role in underwriting or financing new oil and gas exploration and development, which is pushing climate change past the point of no return.  Proponents suggest that the expensive, long-term investments needed for fossil fuel industry expansion are bad economic and environmental bets.  They want this to end or be phased out—and for companies to explain their decisions.  Insurers face ever-increasing claims connected to extreme weather such as fires, floods and hurricanes, with losses from U.S. natural catastrophes alone reaching a combined total of $176 billion in 2020 and 2021.  Banks also face a growing array of fossil fuel restrictions.  All also must consider ongoing energy market disruptions, the new norm.

Shareholder proponents this year are asking companies to adopt a policy for a time-bound phase-out of lending and underwriting for projects and companies engaged in new fossil fuel exploration and development. They ask that the policy align with the IPCC’s recommendation to limit global temperature rise to 1.5 degree Celsius. Proposals are pending at insurance companies, banks and financial services firms. 

Paid Sick Leave 

The Covid pandemic highlighted glaring gaps in the U.S. health care system, including that tens of millions of Americans have no paid sick leave, commonplace in other industrialized countries. Railway workers have been particularly vocal, noting they move nearly 40% of the country’s freight, yet only receive sick benefits after seven days of illness. Workers who fall ill must choose between staying home and risk losing their jobs or going to work and putting co-workers and the public at risk. Proponents withdrew a proposal asking that all full- and part-time workers receive paid sick leave at Norfolk Southern, but one is still pending at Union Pacific. Further, the retail sector has a particularly large group of workers without paid sick leave and proposals also are pending at CVS Health, Denny’s, TJX and Yum Brands.   

Child Labor in Cocoa Production 

In 2001, Mondelēz was one of eight companies to join The Cocoa Protocol to eliminate the ‘worst forms of child labor’ in cocoa production by 2005. Nearly 20 years later, the Protocol has yet to be fulfilled. In 2012, Mondelēz launched Coca Life, a strategy to improve wages in farming communities that would mean families do not need to send their children to work. Its goal is to eradicate child labor in its supply chain by 2025. The company says it is 61% of the way there, but lawsuits and human rights groups say it remains a major procurer in Ghana and Côte d’Ivoire, the source of 60% of the world’s cocoa and where child labor has been steadily increasing. Shareholders recognize the Company's long-term effort on this issue, but more disclosure is needed. The proposal asks the company to “adopt targets and publicly report quantitative metrics appropriate to assessing whether Mondelēz is on course to eradicate child labor in all forms from the Company’s cocoa supply chain by 2025.”

 

Reminder: The VOTING DEADLINE for all U.S. companies is midnight Eastern Time on the DAY BEFORE the AGM.
Look for our Proxy Vote Alerts every week. Have a great proxy season!