Dutch investment giant PGGM has become the lead filer of a shareholder proposal at a US company for the first time, asking fast food chain McDonald’s to report on water risks.
The Zeist-based fund, which manages €221 billion on behalf of Dutch pension funds, has called on McDonald’s to report on the “feasibility and practicality of establishing time-bound, quantitative goals to reduce supply chain water usage to mitigate value chain risks related to global water scarcity in high-risk areas”.
A spokesperson for PGGM told Responsible Investor that the fund had previously co-filed in the US but had not been the lead filer of a resolution. “We increasingly see shareholder proposals as a means of stepping up our engagement efforts,” they added.
In the text of the proposal, PGGM noted that while McDonald’s has conducted a water risk assessment of its value chain, “it has not disclosed the results”.
The company has also failed to disclose details of the “water-related impacts” of its engagement with suppliers “on regenerative agriculture” or a “measurable strategy to mitigate water risks”, the fund added.
McDonald’s had not commented on the proposal at the time of publication.
Achmea files at Coca-Cola on health
Another Dutch investor, Achmea Investment Management, is also among the early filers of the US 2024 proxy season.
The €175 billion manager has filed at Coca-Cola, calling on the beverage maker to “adopt an enterprise-wide policy to move toward more healthy products”, to be “defined in the discretion of the company and beyond sugar reduction”.
It added that the policy should include “an assessment of the current healthiness of its portfolio, targets with timelines and metrics for measuring implementation and disclosure”.
Achmea co-filed with UK charity fund manager CCLA, UK-based investment firm Cardano and Dutch non-profit health insurer VGZ.
Achmea’s senior engagement specialist, Frank Wagemans, told RI that the manager has been engaging with Coca-Cola as part of a focus on access to nutrition, an engagement theme it has run for several years.
“Unlike most other companies we have engaged with, Coca-Cola does not map the healthiness of its portfolio and set goals to increase its healthiness,” he said.
“By submitting this proposal, we aim to make it clear that we expect food and beverage producers to be transparent on the healthiness of their products and to develop a sound strategy.”
Last year, Achmea filed a proposal at Uber Technologies requesting that the ride app undertake an independent third-party audit on driver health and safety. It was supported by 9 percent of shareholders.
Coca-Cola is seeking to exclude Achmea’s proposal via the US Securities and Exchange Commission’s (SEC) “no action” process, the mechanism by which firms can seek the regulator’s blessing to prevent a resolution being put to its shareholders. It argues that the request is vague and that it delves too deeply into ordinary business matters.
Wagemans told RI that Achmea is “confident” that the company will be receptive to addressing “the crucial topic of healthy food and beverages”.
“We hope our proposal will serve as a reminder to Coca-Cola to take the necessary next step and engage in the ongoing conversation on this topic, which is likely to become even more relevant,” he added.
European investors are increasingly becoming a feature of the US proxy season, with a number of big asset managers, including Amundi and Legal & General Investment Management, filing or co-filing in recent years.
The 2023 proxy season saw the manager of Norway’s trillion-dollar sovereign wealth fund, Norges Bank Investment Management, quietly file its first climate proposals in the US.
Living wage request withdrawn at Disney
The filers of a “living wage” proposal at Disney have withdrawn their request in order to “strengthen” it, in response to arguments put forward by the US entertainment giant in its bid to exclude it.
The proposal, which was filed by US non-profit The Nathan Cummings Foundation with the support of The Shareholder Commons (TSC), asked Disney to establish wage policies that will provide workers with “the minimum earnings necessary to meet a family’s basic needs”.
The company sought to exclude the proposal, arguing to the SEC that it fell foul of the rule around ordinary business.
Sara Murphy, chief strategy officer at TSC, told RI that Disney’s “no action” letter “provided us with a good opportunity to strengthen the living wage proposal based on the company’s arguments”.
It was withdrawn so that it could be improved and filed at other companies this year and potentially at Disney next year, she added.
“This type of proposal is tricky in the US, and we’re trying to make certain that the SEC and shareholders understand that the issue is about portfolio-level impacts of cost externalisation – in this case associated with poverty wages and income inequality – rather than any single company’s human resources approach,” Murphy said.
US carmakers General Motors and Tesla have been hit with pioneering shareholder proposals on deep-sea mining filed by non-profit As You Sow as part of a broader engagement on the topic with automobile manufacturers.
General Motors has been called upon to publicly disclose its policies on the use of deep-sea mined minerals in its production and supply chains.
Tesla has been urged to commit to a moratorium on sourcing minerals from deep sea mining, “consistent with the principles announced in the Business Statement Supporting a Moratorium on Deep Sea Mining”.
Elizabeth Levy, coordinator of As You Sow’s biodiversity initiative, told RI: “Demand for battery materials will increase as we transition to EV transportation. Automakers can set an example for the auto industry by pledging to accelerate the transition without risking irreversible harm to some of the world’s last remaining pristine ecosystems.”
Levy noted that Rivian, BMW, Volvo, Volkswagen and Renault have already committed to exclude deep sea minerals from their supply chains. “This shows the auto industry that the significant reputational, financial, and regulatory risks associated with deep sea mining are unnecessary and avoidable,” she said.
To date, nature-specific and nature-related shareholder resolutions have been relatively underrepresented at AGMs. RI’s 2024 biodiversity outlook covered how this is changing and looked at other proposals already filed for this year.
For example, Green Century Capital Management has filed resolutions calling on food companies to start reporting in line with the recommendations of Taskforce on Nature-related Financial Disclosures (TNFD).