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AGM Season: The latest on ESG-related resolutions – June 5th 2020

Climate Action 100+ lead investors vote differently on Shell climate targets

The Church of England Pension Board (CEPB) and Dutch asset manager Robeco arrived at different voting decisions on a proposal asking Shell to establish Paris-aligned climate targets, despite the pair co-leading engagement on the European oil major for Climate Action 100+.

In the wake of Shell’s recent 2050 net-zero “ambition”, CEPB publicly announced that it would not support the proposal, filed by campaign group Follow This, this year, describing it as unnecessary in light of the company's “substantial” announcement. 

Robeco, by contrast, abstained from the vote, as did giant Dutch fund manager APG, which also supports the engagement with Shell as part of CA100+.

The Follow This proposal, which calls for Paris-aligned climate targets covering Scope 1,2 and 3 emissions, doubled its support this year to 14%, including votes from Californian public pension giant and CA100+ member CalPERS.

Last month, London-based asset manager Sarasin & Partners questioned the significance of the recent net-zero commitments by European oil giants including Shell, arguing that without some concrete cap-ex commitments they are “empty promises”.

Similar concerns about these pledges were also raised by asset owner initiative the Transition Pathway Initiative (TPI), which is Co-Chaired by CEBP’s Director of Ethics and Engagement, Adam Matthews. TPI research found that even the most ambitious commitments by European oil majors are not aligned with a below 2ºC warming scenario, despite claims to the contrary. 

Interestingly, Robeco supported the same Follow This proposal at Norwegian state-backed oil giant Equinor (formerly Statoil) this season, as did CalPERS. That resolution also doubled its support, receiving 27% of non-governmental votes compared to 12% in 2019.

A spokesperson for Robeco told RI that the “differentiating factor” between Shell and Equinor was that Shell “has already moved further by translating a long-term ambition into short-term targets”, citing its recent announcement as contributing to the decision to abstain. 

Last week, just shy of 17% of shareholders supported similar investor-led proposal at Total, calling on the French oil giant to amend its articles of association so that it must report yearly on its efforts to align with the Paris Agreement, including disclosing “appropriate targets” for the “reduction of direct or indirect greenhouse gas emissions”. 

Proposal on Thomson Reuters’ links to US immigration dept fails 

This week, a proposal at Thomson Reuters calling on the Canadian media and tech firm to investigate potential human rights abuses linked to its contracts with the US’ Immigration and Customs Enforcement agency – known as ‘ICE’  – was backed by just 8% of shareholders, although, according to BCGEU, the Canadian union behind the proposal, that equated to around 30% of independent shareholders. 

Thomson Reuters has reportedly received over $70m in contracts to provide data brokerage services that help ICE target undocumented immigrants for detention and deportation. 

Treatment of undocumented immigrants under President Trump’s administration, including the forced separation of children from their parents that came to light in 2018, has been widely condemned. 

Last year, US faith investors filed resolutions at companies they deemed to be at risk of human rights violations as a result of government contracts around immigration.

Shareholder concerns over Zuckerberg’s monopoly at Facebook go to the vote again

Last week, around a fifth of shareholders (19.5%) supported the proposal at Facebook calling for an independent Chair – an attempt to dilute the control of the social media giant’s CEO Mark Zukerberg.

Jonas Kron, Director of Shareholder Advocacy at Trillium, the Boston-based SRI firm behind the proposal, told RI that, excluding company votes, shareholder support for the resolution was 63%, which is slightly down on last year (68%).

Despite this dip, Kron told RI that there is “still a supermajority of the outside shareholders expressing disapproval with a unified Chair/CEO”. 

Any proposal at Facebook, however, is severely hampered by the company’s dual-class structure, which gives Zuckerberg, who owns around 13% of Facebook, approximately 58% of the company’s voting shares.

A proposal seeking to address this very issue by calling for the introduction of a ‘one share, one vote’ governance structure was backed by 27% at the annual meeting (27 May). 

The proposal was filed by US SRI investor Northstar and the Office of New York State Comptroller Thomas DiNapoli.

Another resolution calling on Facebook to nominate a board director with “human and/or civil rights expertise” in a bid to address the company’s “ineffectual” content governance was supported by just 3.7% of shareholders.  

Staying in the US

Two proposals on political expenditure received shareholder support in the 50% range last month. 53% of shareholders supported a proposal on the issue at US financial services firm Western Union (14 May) and 50% backed a similar proposal at US life science giant Illumina (27 May). 

Another huge result that occurred this proxy season was at pharma giant Johnson & Johnson (23 April) when an impressive 61% supported a proposal on its governance of opioids-related risks. That proposal was filed as part of the Investors for Opioid and Pharmaceutical Accountability (IOPA).