Pioneering proposals on reproductive rights at US retail giants have secured substantial support from investors in their maiden outing, with a high of 32 percent for one at Lowe’s on 27 May.
Just shy of 13 percent supported a near-identical proposal at Walmart on 1 June, but Responsible Investor understands that when insider votes are discounted the tally among shareholders amounts to around 31 percent.
A third resolution on the issue went to the vote at TJX on Tuesday but that result is not yet known.
Filed in the months before the leak from the Supreme Court on Roe v Wade, the proposals took on additional significance following the likely repeal of the landmark 1973 legislation that made abortion legal across the US.
Each company, separately, was asked to report publicly on known and potential risks and costs to their business “caused by enacted or proposed state policies severely restricting access to reproductive health care”. Furthermore, they were asked to detail any strategies “beyond litigation and legal compliance” they may undertake to “minimise or mitigate these risks”.
Several big US companies, including Starbucks, Amazon and Citigroup, have made commitments in recent months to support workers with travel costs to help bypass state laws curbing abortion access.
Shelley Alpern, director of corporate engagement at Rhia Ventures, a US impact fund focused on women’s reproductive and maternal health, which assisted in the coordination of the three proposals, described the tallies as “strong votes, particularly for first-year proposals”. She said the level of support demonstrated the “growing investor interest in how companies will manage to provide quality health care and meet their diversity commitments in a post-Roe v Wade environment”.
Another proposal at Lowe’s requesting a report on race and gender-based pay gaps secured majority support of 58 percent. It was filed by US activist investor Arjuna Capital, which achieved a similar tally (60 percent) on the issue earlier in the year with a proposal filed at Disney.
“Investors expect a new standard of accountability on racial and gender pay equity, and Lowe’s board heard that message loud and clear,” Natasha Lamb, managing partner at Arjuna, told RI.
Arjuna also filed a proposal again this year at Comcast, calling on the telecommunications giant, which owns US TV network NBC, to undertake an independent public investigation into the effectiveness of its sexual harassment policies. The proposal was supported by 22 percent of shareholders on 1 June, the same tally as the year before.
Another proposal asking Comcast to report on how its 401k pension plan marries up with its climate goals was supported by just 6 percent of shareholders. The new proposal, which was filed by US non-profit As You Sow, fared slightly better at Amazon, with 9 percent support last week. Both resolutions passed the threshold set by the US Securities and Exchange Commission for refiling next year.
Human rights risks proposal at gunmaker Sturm Ruger gets big majority
More than two-thirds of investors (68 percent) backed a proposal last week at Sturm Ruger calling on the US gunmaker to undertake a third-party human rights impact assessment.
The proposal, which was filed by members of US-based nonprofit the Interfaith Centre on Corporate Responsibility (ICCR), went to the vote days after the massacre at a Texas elementary school where 21 people were killed, including 19 children.
It called on the company to “assess and produce recommendations for improving the human rights impacts of its policies, practices and products, above and beyond legal and regulatory matters”.
Following the vote, it was reported that Sturm Ruger’s CEO, Christopher Killoy, attributed the passage of the proposal largely to “the support of institutional shareholders, many of whom declined to even speak with us, and others who blindly followed the guidance of ISS (Institutional Shareholder Services) or Glass Lewis”.
Laura Krausa, a representative of US faith investor CommonSpirit Health, the lead proponent of the resolution, said: “We hope Sturm Ruger will agree to conduct the assessment in light of the shareholder support, and we would welcome the opportunity to partner with them in the process. We refuse to believe there is nothing we can do to reduce gun violence.”
On 21 June, another proposal on guns goes to the vote at Mastercard. Filed by the public pension fund for the US state of Rhode Island, it asks the US financial services firm to report on risks associated with its provision of payment services for the sale and purchase of “untraceable firearms”, including so-called ghost guns.
The $11 billion fund requests that Mastercard, within the next year, report on “if and how” it intends to “reduce the risk associated with the processing of payments involving its cards and/or electronic payment system services for the sale and purchase of untraceable firearms, including ‘Buy, Build, Shoot’ firearm kits, components and/or accessories used to assemble privately made firearms known as ‘Ghost Guns’”.
Neither ISS nor Glass Lewis are supporting the proposal at Mastercard. Both cite the company’s existing policies and new regulations around the sale and manufacturing of such guns.
On 11 April, President Biden announced that the US Department of Justice had issued a rule which, if implemented as scheduled on 24 August, would require manufacturers and distributors of ghost gun components to become federally licensed, perform background checks prior to sale and put serial numbers on parts.
In a filing to the SEC on 31 May, however, the Rhode Island fund notes that to date “Mastercard has declined to disclose what, if any, steps the company will take when the rule takes effect – or what steps the company will take if implementation of the rule is delayed”.
A spokesperson for Mastercard told RI that “where laws prohibit the sale of unserialised firearms parts, we are working to ensure Mastercard products cannot be used to purchase them”. They added that the firm believes “it is the responsibility of elected officials to enact meaningful policies to address the issue of gun violence, while it remains Mastercard’s role to ensure that consumers are permitted to make lawful purchases on our network”.
Seventeen shareholder proposals with an ESG focus went to the vote at US tech giant Alphabet on 1 June but none passed. The issue of dual share class structures, whereby insiders hold shares with vastly inordinate voting power, is a well-known one.
Ironically, it was a proposal calling for the phased introduction of one vote, one share that was best supported, with 33 percent of the vote.
The second most popular proposal, which was filed with the support of Dutch investor Robeco and Canada’s NEI Investments, asked Alphabet to undertake an independent assessment of its efforts on human rights impacts associated with misinformation and disinformation. Twenty-three percent of shareholders backed the proposal.
Proposals calling for an independent racial equity audit and a report on water use risks were supported by 22 percent of Alphabet shareholders.
On Wednesday, around 96 percent of shareholders in Caterpillar supported a climate proposal calling on the US construction machinery manufacturer to set Paris-aligned emissions goals, including Scope 3 emissions from customer use of products.
The company itself supported the proposal, which was filed by As You Sow along with Amalgamated Bank, Canada Post Corporation Pension Plan, and Canada’s responsible investment association SHARE.
“Today’s majority vote is a loud and clear call from Caterpillar’s ownership that the company must address its significant climate impact and step into a leadership position in decarbonising the industrials sector,” said Ivan Frishberg, chief sustainability officer at Amalgamated Bank.
Caterpillar also faced a proposal asking it to report on its approach to mitigating the risks associated with business activities in conflict-affected and high-risk areas. Filer Wespath told RI that preliminary results show it was supported by 10 percent of shareholders.
A spokesperson for the US faith investor told RI that it “will continue to engage other investors and the business community on the financial materiality of human rights risks in CAHRA [conflict affected and high-risk areas]”.
Moving to South Africa
A climate proposal at South Africa’s largest banking group, Standard Bank, has been supported by 99.7 percent of shareholders, according to filer nonprofit Just Share.
Standard Bank, which has refused to table climate proposals in the past, agreed to table the proposal this year after agreeing on the wording of the resolution with co-filers Just Share and Aeon Investment Management.
The non-binding advisory resolution requests that the bank, over a three-year timeframe, provides shareholders with increasingly detailed information about its financed emissions from oil and gas.
The proposal, which went to the vote on 31 May, also requests that the bank update its climate policy by March 2025 to include short, medium and long-term targets for reducing these financed emissions, on a timeline aligned with the Paris Agreement.
Writing on LinkedIn, Tracey Davies, executive director of Just Share, said: “Getting this resolution onto the ballot was a long, hard battle, but I think that all of us, including – I hope – those at Standard Bank who were willing to engage patiently and professionally throughout the process, learned a huge amount.”