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Investors’ lobbying resolutions start to get substantial support at US blue-chips

After Ford, Duke and Disney AGMs, the issue is set to come up at GM, Blackrock and Exxon

Lobbying resolutions at Ford Motors, Duke Energy and Walt Disney have received substantial support from shareholders, as investors press US companies for greater disclosure of trade associations, particularly those opposing meaningful climate action.

Further climate lobbying resolutions are still to be put to the vote at high profile companies such as Ford’s rival General Motors (4 June), Blackrock (23 May) and ExxonMobil (29 May).

Companies’ oversight of lobbying, particularly on climate, is an area that has seen an “explosion of interest” over the last year or so, according to Tim Smith, Director of ESG Shareowner Engagement at Boston-based SRI firm Walden Asset Management, who spoke to RI last year on the issue.

Last week saw signs of this as 38.7% of ‘outside’ shareholders – meaning those not from the company – backed a resolution calling on Ford to report on its direct and indirect lobbying.

The resolution cited the “reputational risks” associated with the activities of trade bodies, such as the US Chamber of Commerce, whose position on climate change contradicts the company’s own public stance.

Overall the resolution, which both Institutional Shareholder Services (ISS) and Glass Lewis recommended support for, was backed by 16.7% of shareholders, virtually the same level of support (16.8%) as last year’s resolution filed by the Unitarian Universalist Association.

The Office of the New York City Comptroller filed the resolutions at Ford and General Motors and leads on them as part of the Climate Action 100+ (CA100+), the engagement initiative backed by investors representing $33trn.

Anne Simpson, Director of Board Governance and Strategy at California pension giant CalPERS and inaugural Chair of the CA100+ Steering Committee, told RI last year that lobbying disclosure is a key focus of CA100+ and is included as part of its engagement on good governance.She also singled out the automotive sector as one investors are increasingly concerned about, echoing concerns raised by non-profit group Influence Map’s 2018 report on the sector.

The Ford vote came exactly a week after 36.6% of investors – including the $207bn New York State Common Retirement Fund – supported another lobbying resolution, which didn’t explicitly mention climate change, filed at Duke Energy.

That resolution was again filed at the US energy firm by Mercy Investment Services – last year’s resolution was withdrawn following dialogue, according to the Ceres database.

Ceres’ database also reveals that Walt Disney saw 39.3% of its investors back a lobbying resolution citing climate change at the company’s annual meeting on March 7 that was filed by Boston-based SRI firm Zevin Asset Management.

Swedish pension fund AP7, which is leading its own European climate lobbying initiative with the Church of England Pension Board, co-filed the Ford resolution along with Dutch asset manager Robeco and the Unitarian Universalist Association

Carola van Lamoen, Robeco’s head active ownership described the Ford vote as “substantial” and a “clear sign to the company”.

“The aim of the resolution was to increase transparency on the company’s lobbying efforts and to gain a better understanding of the policies in place, to ensure that these efforts are in line with the company’s strategy and messaging around their climate efforts.”

She added that “next steps will be discussed together with other investors of the Climate Action 100+ group”.

The votes these US companies follow landmark climate lobbying resolutions at Australian firms last year which peaked with the 46% support for the resolution at energy giant Origin Energy.