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ESG resolution round-up: majority support for first civil rights audit proposal of 2022 at Apple

This proxy season sees record breaking tallies early on, including largest ever support for E&S proposal at US fast food chain.

Investor support for racial justice and civil rights audit proposals reached a new high last Friday, when 53 percent of Apple’s shareholders backed calls for the tech giant to undertake an independent assessment into its adverse impacts on civil rights – the first time such a proposal has received majority support at any large company.  

The resolution was co-filed by SOC Investment Group, SEIU Capital Stewardship Program and Trillium Asset Management – who between them filed most of the racial equity / civil rights audit proposals last year, including eight at US financial giants. 

Last year’s audit proposals, filed amid growing awareness of the Black Lives Matter movement, prompted commitments from the likes of Citigroup and BlackRock to undertake such assessments.  

The vote at Apple is the first equity audit-style proposal to go to the vote this proxy season and dozens more are set to be put to companies in the coming months, including again at Wells Fargo and Goldman Sachs.  

Support at Apple was undoubtedly buoyed by the backing of the big US proxy advisors ISS and Glass Lewis. Having opposed some of the first proposals, at Citigroup and Bank of America, early in 2021, ISS has shifted its position on racial justice/civil rights audits. 

Since then, it has backed racial justice audit proposals as Amazon (which garnered 44 percent support at vote) and Oracle (34 percent), among others.  

Big US public pension funds also supported the recent proposal at Apple, including Californian giants CalSTRS and CalPERS.Another supporter was Norges Bank Investment Management (NBIM), manager of Norway’s trillion-dollar sovereign wealth fund, which, like ISS, has shifted its stance on such proposals. NBIM voted against most audit proposals last year, including the one at Amazon, before supporting the resolution at Oracle in the autumn.  

Tejal Patel, Corporate Governance Director at SOC told RI that the Apple vote will “build momentum and lead to more engagements” with recipients and, she hopes, “more settlements.” 

Of the dozens of racial justice/civil rights audit proposals being filed this proxy season, only pharma firm Johnson & Johnson, insurer Travelers and fast-food giant McDonald’s sought to exclude them using the US Securities and Exchange Commission’s (SEC) ‘no action’ process. The regulator has already rejected Johnson & Johnson’s bid.  

Apple’s AGM also saw investors come out in favour of a request for it to report on how it uses ‘concealment clauses’ – non-disclosure agreements with staff – in cases of “harassment, discrimination and other unlawful acts”. That resolution was backed by 50.4 percent, according to its filer, California’s Nia Impact Capital, and comes after the Department of Labor confirmed it was investigating Apple as part of its whistleblower protection programme. 

Kristin Hull, founder and CEO of Nia Impact Capital, described the result as a “David and Goliath moment”, and added that she was “thrilled that investors are sending a strong message that human capital management and building a positive and inclusive workplace matters”.   

Majority support on gender and racial pay gap report at Disney  

Could the early tallies at Apple be a sign that the gap is closing on support for socially-focused shareholder proposals and environmental ones? 

Well, with 59 percent of shareholders backing a request for Disney to report on race- and gender-based pay gaps, it’s beginning to look like it. 

The entertainment giant had sought, unsuccessfully, to exclude the resolution, which was filed by US activist investor Arjuna Capital, arguing to the SEC that it impinged on its everyday business – particularly as the company is fighting a lawsuit brought by current and former employees who allege that they were paid less than male colleagues. 

Among the supporters of the proposal were US public pension giants CalPERS, CalSTRS and the Office of the New York City Comptroller, which oversees the City’s five public pension funds. 

CalSTRS and NBIM, however, voted against the same proposal at Apple last week, in a vote that gained 33.6 percent support.  

Recording breaking 95% support for plastics proposal at US fast-food firm, despite company opposition  

History was made last week when an incredible 95 percent of investors supported a proposal at fast food firm Jack in the Box, asking it step up its efforts on plastic packaging. Not only did the vote smash the record for the most support for a plastics-focused proposal (set last year when 45 percent of investors backed a resolution at US supermarket Kroger), but it is believed to be the largest support ever for a sustainability-related resolution that is opposed by the company itself.   

“We’ve never seen investors demonstrate concern for packaging-related risks at this scale before,” Annalisa Tarizzo, Shareholder Advocate at Green Century, the filing US investment manager, said.   

Amundi and Ethos file ‘first ever’ Swiss climate proposal at Credit Suisse 

Europe’s largest asset manager, Amundi, has teamed up with Switzerland’s Ethos Foundation to file the first ever climate proposal at a Swiss company, asking Credit Suisse to amend its articles of association to include short- and long-term fossil fuel financing targets that align with the goal of limit global warming to 1.5°C.  

Campaign group ShareAction, which is supporting the proposal, has filed similar requests at Barclays and HSBC in recent years, prompting the former to set a Net Zero goal and the latter to set phase-out dates for its thermal coal financing. 

Unilever proposal on health impacts withdrawn following commitment  

ShareAction withdrew a proposal at Unilever this week after the firm committed to annually benchmark its products against the widely endorsed Nutrient Profile Models – used by many governments. ShareAction, which saw similar success last year at Tesco, said a lack of progress on the topic of health and nutrition had prompted it to file the resolution, which was backed by 11 institutional investors including Candriam, ACTIAM, CCLA and the Greater Manchester Pension Fund.   

Unilever will publish its first report in October 2022 and has also agreed to set targets for growing the proportion of its healthier products.  

Investors lobby SEC Chair to allow tax proposal at Amazon 

A $3.5trn consortium of investors has written to the Chair of the SEC, Gary Gensler, urging it not to allow Amazon to omit a vote on tax transparency at its upcoming AGM.  

Greater Manchester Pension Fund, Storebrand Asset Management, Robeco, Royal London Asset Management, Nordea, Actiam, ABP and New York City Office of the Comptroller are among those arguing that: “A company’s tax practices are financially material. Aggressive tax practices can expose a company – and its investors – to increased scrutiny from tax authorities, adjustment risks, and increase their vulnerability to changes in tax rules as countries look to protect their tax bases from deleterious practices.”  

The proposal, filed by US faith investor Missionary Oblates of Mary Immaculate-United States, asks Amazon to issue a tax transparency report based on the Global Reporting Initiative’s Tax Standard. 

Majority Action launches ‘vote no’ campaign against Chevron CEO and director 

Majority Action has launched a campaign to boot Chevron’s CEO and Chair, Michael Wirth, and Lead Director, Ronald Sugar, off the board. The move is driven by what the US non-profit alleges is an alleged failure by the oil major to adequately respond to majority votes on emission reductions and climate lobbying.