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ESG resolution round-up: US pension giants back ‘ghost gun’ proposal at Mastercard

More support for reproductive rights proposals at US retailers; proxy voting season gets underway in Japan with first-ever institutional investor climate proposals.

Three of the largest US public pension funds are supporting a shareholder proposal at Mastercard today calling on the 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.     

Californian public pension giants CalPERS and CalSTRS, and the Office of the New York City Comptroller, Brad Lander, which oversees the city’s five pension pots, have all pre-disclosed that they will support the proposal.  

CalSTRS told Responsible Investor in April that it had been engaging with credit card providers on the issue of ghost guns – unserialised and untraceable firearms that can be bought online and assembled at home – as part of its wider work with the firearms industry, which began in 2019.  

Michael Weston, public engagement manager of sustainable investment and stewardship strategies at the $314 billion fund, said at the time that credit card firms had been “receptive” to discussing its concerns. 

Filed by the public pension fund for the US state of Rhode Island, the resolution 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’”.  

Norges Bank Investment Management (NBIM), the manager of Norway’s trillion-dollar sovereign wealth fund, has disclosed that it will oppose the ghost gun proposal today. 

Neither ISS nor Glass Lewis supported the proposal in their recommendations. Both proxy advisers cite the company’s existing policies and new regulations around the sale and manufacturing of such guns.   

On 11 April, President Joe 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 recently told RI that “where laws prohibit the sale of unserialised firearms parts, we are working to ensure [our] 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”. 

CalSTRS has also revealed plans to oppose six directors at Mastercard, including chair Merit E Janow and Lance Uggla, founder and CEO of BeyondNetZero, the climate solutions investment firm set up by US private equity firm General Atlantic. The pension fund gives no rationale for its voting decision on the website but last year the fund supported all directors at the annual general meeting. RI has reached out for comment.  

Reproductive rights proposal at TJX gets substantial support 

Over one-quarter of shareholders (29 percent) supported the reproductive rights proposal at TJX, filed by Boston-based Trillium Asset Management.  

The pioneering proposal, which went to the vote on 7 June, was the third of its kind to be put to US retailers this year. All achieved substantial support, especially for a first-time proposal.  

Last month, 32 percent of shareholders supported it at home improvement chain Lowe’s, and on 1 June, just shy of 13 percent supported the resolution at Walmart, equivalent to 31 percent when insider votes are discounted.  

Filed in the months before the leak from the Supreme Court on Roe v Wade, the proposals took on additional significance given 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 might undertake to “minimise or mitigate these risks”.     

Another proposal calling on TJX to oversee an independent assessment into the effectiveness of its supply chain due diligence practices in preventing forced, child, and prison labour was supported by 24 percent.  

One-third of TJX shareholders also supported a proposal calling on the company to adopt a policy entitling all employees to some amount of paid sick leave.  

Upcoming votes 

On Thursday, four shareholder proposals will go to the vote at retail company Kroger, including one filed by US non-profit As You Sow asking the US supermarket giant to report on how it can reduce the use of plastics. Another filed by US impact specialist Domini asks the company to disclose how its policies protect farmers in its supply chain from human rights violations, “including forced labour, sexual assault, heat exhaustion, and covid-19”. 

While the US proxy season is now winding down, it is just getting started in Japan, with a number of key annual meeting taking place this month, including at electricity provider J-Power on 28 June. The Japanese coal-powered utility is facing two climate proposals filed by European investment heavyweights Amundi, Man Group and the asset management arm of HSBC, urging the firm to ramp up its decarbonisation efforts. The climate proposals are the first to be filed by institutional investors in Japan.