ESG Proxy Vote Alerts
Proxy Season's Biggest Week
Below are key votes for the week of May 23-27.
Many of corporate America’s biggest names will face about 60 shareholder resolution votes this week. And that doesn’t even include the additional resolutions that were filed but later withdrawn. Amazon had an unprecedented 20 resolutions filed and 12 will go to a vote. Meta Platforms/Facebook had a dozen resolutions filed and 10 will be voted on. ExxonMobil (8 filed), Chevron (7 filed), Twitter and Travelers – all have 5 resolutions going to a vote. BlackRock, Lowe’s, McDonald’s, Merck and Morgan Stanley all have at least one resolution being voted on. These resolutions cover a wide variety of issues (including some anti-ESG resolutions). We can’t discuss them all, but here are some resolutions and ESG-related board votes that we think are particularly noteworthy.
Political Spending Disclosure
For over a decade, resolutions on corporate political spending have been the largest single issue raised by shareholders. Climate change is the top concern this year, but interest about corporate political influence remains strong. This week will see several resolutions on electoral contributions go to a vote. They ask for disclosure of political contribution oversight and expenditures, recipients and decision making.
- Vote due date: Dollar General 5/24, ExxonMobil 5/24, Twitter 5/24, Flowers Foods 5/25, McDonald’s 5/25
- Learn more: A Model Code for Companies to Govern Their Political Spending
Concealment Clauses – How Companies Hide Sexual/Racial Harassment and Discrimination
Concealment clauses, mandatory arbitration and non-disclosure agreements have become a normal part of corporate employment contracts. Yet these policies are widely known to suppress information about sexual harassment and other employment problems such as wage theft or racial discrimination. This new resolution has gone to a vote twice so far and garnered 65% at IBM and 50% at Apple. The resolution asks for a “report assessing the potential risks to the company associated with its use of concealment clauses in the context of harassment, discrimination and other unlawful acts.”
- Vote due date: Amazon 5/24, Meta/Facebook 5/24, Twitter 5/24
- Learn more: Concealing Harassment and Discrimination Claims Hinders Diversity Efforts
Meta/Facebook’s Role in Online Child Sexual Exploitation
Meta is the world’s largest facilitator of online child sexual abuse materials (CSAM). In 2021 there were 29 million reports of CSAM, and 27 million (92%) were found on Meta apps. This is a 69% increase from Meta’s 16 million reports when shareholders first contacted the company in 2019. Meta plans to extend end-to-end encryption to all of its platforms, which is expected to effectively make much of CSAM invisible, hiding child victims and sexual predators from the reach of law enforcement. This third-year resolution asks for a report on how Meta’s end-to-end encryption plans will affect child safety.
- Vote due date: Meta/Facebook 5/24
- Learn more: Finding the Balance Between Child Safety and Internet Privacy
McDonald’s Board Fight over Animal Welfare
Billionaire Carl Icahn is backing dissident directors because he believes McDonald’s has not followed through with its 2012 pledge to phase out gestation crates for pigs. Gestation crates are metal pens so narrow that pigs cannot walk or even turn around. Animal welfare advocates decry the physical and mental harms to pigs living in these conditions.
- Vote due date: (no resolution – contested board election) McDonald’s 5/25
- Learn more: McDonald's Breaks Animal Welfare Pledge - Now Faces Board Battle
Climate Audits and the Real Cost of Transitioning to a Low Carbon Economy
Oil and gas companies continue to develop new fossil fuel resources, assuming several decades more of continued growth. Shareholders want companies to provide a report on what their business model would look like if they follow science-based net-zero goals. These new resolutions ask for an audited report assessing how applying the IEA’s “Net Zero by 2050” pathway would affect company assumptions, estimates and valuations underlying financial statements, including those on carbon prices, retirement obligations and capital expenditures.
- Vote due date: Chevron 5/24, ExxonMobil 5/24
- Learn more: Directors And Auditors Fail To Account For Climate Risks
Reducing Single Use Plastic
Plastic pollution has reached critical levels. Ocean plastics in particular have a devastating impact on sea life. At the heart of this problem is single-use plastic. Exxon is the world’s largest producer of plastic resins bound for these applications, and its production of virgin plastics are significantly expanding despite the growing understanding of harms and efforts to cut back. Shareholders are asking Exxon for an audited report addressing whether and how a significant reduction in virgin plastic demand would affect the company. A similar resolution at Chevron was withdrawn. Related resolutions at McDonald’s and Amazon ask the companies to report on how they will reduce their use of plastic.
- Vote due date: ExxonMobil 5/24, Amazon 5/24, McDonald’s 5/25
- Learn more: Plastic Pollution - Holding Big Oil Accountable for Plastic Mismanagement
The “Vote No” Movement Against “Bad Climate” Boards
Frustrated by what they see as an insufficient response to climate change, some shareholders no longer wait to vote on a climate-related resolution, but have begun voting against board directors at companies deemed to be high GHG emitters. Groups such as Ceres and Majority Action provide guidance and a list of companies to help shareholders identify board members.
- Vote due date: (no resolution; board director votes) Chevron 5/24, ExxonMobil 5/24
- Learn more: Boards Face "NO" Votes Due to Lack of Climate Governance Practices
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!