The number of shareholder proposals filed at US companies on workforce diversity has doubled this year to a record 69, driven by the growing focus on racial injustice after the killing of George Floyd last May and the impact of the Black Lives Matter movement.
The numbers have been published in the latest annual overview of voting trends and proposals at US companies from non-profits As You Sow and the Sustainable Investments Institute and proxy services provider Proxy Impact.
As well as racial injustice, this year’s Proxy Preview flags lobbying – particularly on climate – the response to Covid-19 and the new Say on Climate campaign as major themes for investors.
On workforce diversity, the Office of the New York City Comptroller alone has filed 24 proposals this year, pushing companies to publish the annual disclosures they make to the US Equal Employment Opportunity Commission on race, gender and ethnicity.
The Comptroller, who oversees the City’s five public pension funds, has already withdrawn 16 proposals after commitments from firms – likely influenced by warnings from financial heavyweights Blackrock and State Street that they will vote against boards who do not provide such data, observed the report. Proposals still stand at McDonald’s, Netflix and Kraft Heinz, among others, but the number is expected “to shrink significantly” as pressure mounts for companies to prove their pledges around diversity have teeth, the report says.
This year has also seen 18 proposals focused on mitigating racism, including calls for Blackrock, Citigroup, State Street and Goldman Sachs to undertake racial equity audits to analyse how their business activities might have “adverse impacts on non-white stakeholders and communities of colour”. In total, eight financial giants have been hit with that proposal filed by US-based manager CTW Investment Group and US labour union SEIU.
The report describes the Say on Climate campaign, which seeks to secure an annual shareholder vote on companies’ climate plans, as the “biggest new development on climate change”. As You Sow has filed resolutions on the topic at Union Pacific, Monster Beverage and Booking Holdings, but says it “plans to file hundreds of resolutions in the next two years unless companies voluntarily adopt the initiative”. Only Union Pacific, a railway freight company, has sought to block the proposal.
Climate-focused proposals in the US total 66 this year, according to the report, which finds that over the last 10 years average support for such resolutions has grown from just under 19% to 39.4% in 2020.
In a “significant expansion”, 13 of the 66 ask companies for more information on their lobbying activities. Two of those, at Exxon and Delta Air Lines, were filed by BNP Paribas Asset Management. Last year, the same proposals garnered 53.5% support at Chevron, 45.9% at Delta and 31.5% at United Airlines.
Unsurprisingly, a number of proposals this year touch on the Covid-19 pandemic.
Walmart is facing a vote on worker safety, while New York City pension funds and Dutch asset manager APG have filed a similar resolution at Amazon.
Six pharmaceutical giants are being asked to explain how they are factoring government funding into pricing when it comes to Covid vaccines and treatments. Filers of this proposal are members of the Interfaith Center on Corporate Responsibility. One of those, SRI investor Boston Common, has withdrawn its proposal at Gilead Science after company engagement, but Ely Lilly and Johnson & Johnson are seeking to block the resolution from the ballot.