ESG resolution round-up: New York City files freedom of association proposal

Investors call out ExxonMobil lawsuit; ESG proposals at Tyson Foods fail to get majority support; FPIC resolution filed at RBC.

The New York City Office of the Comptroller has filed a freedom of association proposal at property management company FirstService Corp.

The proposal, co-filed with Canadian responsible investment association SHARE, calls on the company to adopt and publicly disclose a human rights policy that adheres to the UN Guiding Principles and recognises the International Labour Organization’s core labour standards on freedom of association and collective bargaining.

The filers recommend that the policy should apply to FirstService’s direct operations and subsidiaries globally. It should include a commitment to non-interference, as well as good faith and timely collective bargaining when employees exercise their rights to form or join a trade union.

The policy should also describe the ongoing due diligence process the company will use to identify, prevent, mitigate and account for any violations of the policy or these rights, including how it will remedy any misaligned practices.

Last year, the two filers – alongside UK proxy adviser PIRC and US-based Trillium Asset Management – were behind the freedom of association audit proposal at Starbucks that received an impressive 52 percent support from shareholders.

And more broadly, while the 2023 season saw average support for sustainability resolutions plunge from the previous year, workers rights appeared to have been insulated from the general decline.

According to a Harvard blog post, nine proposals on freedom of association won 35.5 percent support on average.

For 2024, SHARE has also put forward freedom of association proposals at Tesla and Amazon.

Investors call out ExxonMobil lawsuit

The Interfaith Center on Corporate Responsibility has written to ExxonMobil’s board urging it to convince the US oil major’s management to abandon a lawsuit against Arjuna Capital and Follow This.

Late last month Exxon took the unusual step of filing a lawsuit in Texas against proponents of a climate proposal in a bid to prevent it from being put to shareholders.

Last week, Arjuna Capital and Follow This announced they would be withdrawing their shareholder proposal in light of the legal action.

At the time, Natasha Lamb, chief investment officer at Arjuna Capital, said: “We’re disappointed that Exxon is circumventing the SEC’s shareholder proposal process by proceeding directly to litigation in federal court which will result in silencing investors that voice climate-risk concerns.”

Despite the withdrawal of the proposal, the Financial Times reported Exxon as saying it will “drop a request for an expedited hearing” but would press forward with the case.

The Interfaith Center on Corporate Responsibility said: “We believe this costly and unnecessary suit constitutes a serious threat to shareholder rights. It also sends a clear message that the company is seeking to shut down any debate by its shareholders on actions needed to address climate risk.

“This unprecedented suit risks alienating shareholders, harming Exxon’s reputation and undermining the SEC by circumventing efficient, effective and time-honoured procedures established by the agency.”

Follow This and Arjuna have also withdrawn a similar climate proposal at Chevron. In a document on the SEC’s no-action page, an e-mail from Lamb said that while Arjuna disagreed with the company’s assertions, “we are focusing on a similar shareholder proposal that is now the subject of pending litigation”.

Chevron sought to no-action the proposal because it addressed “substantially the same subject matter as previously submitted stockholder proposals that were included in the company’s 2023 and 2022 proxy materials, and the most recent of those proposals did not receive the support necessary for resubmission”.

Tyson Foods AGM

A key AGM this week for E&S proposals was Thursday’s meeting at Tyson Foods. Resolutions surrounding climate lobbying, illegal child labour, deforestation and circular economy failed to get majority support.

The US food giant’s share structure gives the Tyson family a controlling stake, meaning it is challenging for proposals to attract high support.

Before the meeting, Norges Bank Investment Management declared its intention of supporting all of the proposals, except for the circular economy proposal. The latter, filed by As You Sow, asked the board to issue a report describing opportunities for Tyson to support a circular economy for packaging.

Influential proxy advisory firm Glass Lewis recommended investors to support the votes on climate lobbying and illegal child labour, but against the circular economy and deforestation proposals.

FPIC resolution at RBC

In Canada, the British Columbia General Employees’ Union (BCGEU) has filed an Indigenous people’s-focused proposal at Royal Bank of Canada (RBC).

It calls for a report outlining the effectiveness of RBC’s policies, practices and performance indicators in respecting internationally recognised human rights standards for Indigenous peoples’ rights in its existing and proposed general corporate and project financing.

Emma Pullman, BCGEU capital stewardship officer, told Responsible Investor: “We’re witnessing a real-time shift in shareholder engagement on Indigenous rights. Not only are we seeing more shareholder resolutions related to Indigenous rights and inclusion than ever before – we’re seeing strong investor support for those proposals as well.

“I expect this is just the beginning.”