March round up: the latest on global ESG-related resolutions

SEC gives platform to right wing climate-science denier at Exxon while silencing investors’ climate concerns

This month saw the US Securities and Exchange Commission (SEC) bat away two proposals at ExxonMobil calling on the US oil giant to outline how it plans to reconcile its business with the Paris climate agreement.

One was co-filed by US non-profit, As You Sow and the UK’s Church Commissioners.

The other was filed by Dutch non-profit, Follow This.

As You Sow’s proposal was deemed to have been “substantially implemented” after the  regulator was convinced by the firm’s claims that its strategic planning was already aligned with Paris [see RI’s coverage].

Follow This’ proposal was excluded on a technicality, not just at Exxon but also at Chevron and ConocoPhillips.

The Church Commissioners and New York State, which lead on Exxon as part of Climate Action 100+ (CA100+), have said they will now vote against the firm’s board in response to its positioning on climate.

Eyes will be on CA100+’s newest members, Blackrock and JP Morgan, to see how these two financial heavyweights, which have been accused of shying away from climate votes in the past, will respond to the challenge being thrown down by Exxon.

However, the SEC has ensured that another proposal will go to the vote at Exxon – one filed by right wing commentator and climate-science sceptic, Steven Millloy.

Milloy is a former member of the Trump Administration’s Environmental Protection Agency (EPA) Transition Team and Fox News commentator.

His proposal, entitled ‘Greenwashing Audit’, asks Exxon to report on the costs and benefits “accrued to shareholders, the public health and the environment, including the global climate” as a result of the company’s voluntary “environment-related activities”.

Despite Exxon’s attempts to exclude it, the SEC deemed that Milloy’s proposal should be on the company’s proxy at its annual meeting in May. Writing on his website, Milloy crowed: “I out-lawyered ExxonMobil’s high-priced, white-shoe law firm to ensure my shareholder proposal will be included in ExxonMobil’s 2020 proxy materials”.

“My anti-greenwashing proposal asks the climate bedwetting, pro-CO2 tax oil giant to report to shareholders on the actual costs and benefits of its climate-related activities”.

“Make no mistake: ExxonMobil is the greatest company selling the greatest product in history. But its current greenwashing management, which is actively aiding and abetting climate communists, is dumber than a box of rocks.”

As You Sow’s President, Danielle Fugere, told RI: “If you want any indication that the SEC is not playing fair with regards to oil and gas companies and shareholder concerns, allowing that proposal to go ahead [but not As You Sow’s] is it”.

More Business Roundtable (BRT) proposals:

As You Sow has also filed another BRT proposal this time at US pharma giant McKesson — the non-profit has already successfully got one on the ballot of Blackrock. Its latest BRT resolution calls on McKesson to outline how it plans to align with the commitments its CEO put his name to in the corporate lobby group’s August statement, which appeared to advocate a shift towards stakeholder capitalism.

According to the proposal, McKesson has paid $2.2bn in legal settlements since 1995 in misconduct cases.

Other BRT proposals will go to the vote at Bank of America (22 April), CitiGroup and Goldman Sachs.

Tech giants

Shareholders will have the opportunity to challenge Facebook on its governance of political ads after a proposal put forward by Californian activist Harrington Investments has made it to the ballot. The resolution calls on the social media giant to report on the “operational, reputational, and social license implications” of exempting political advertisements and posts from fact-checking rules.

US activist investor Arjuna Capital also has a resolution pending at Facebook calling on the firm to nominate a director with civil and human rights expertise to stand at the next board election.

Proposals at Facebook, however, face the huge barrier created by the company’s dual-class structure, which gives CEO and Chair, Mark Zuckerberg inordinate control over votes.

Prison labour 

The SEC has allowed US retailers Home Depot and TJX to exclude proposals asking them to report on the use of prison labour in supply chains. The regulator agreed with the companies that the proposals fell afoul of the micromanagement (ordinary business) rule. Both resolutions were filed by US SRI investor Northstar Asset Management, which has engaged and filed on the topic for several years at these and other companies.

“We are alarmed that the SEC appears to have decided that issues of prison labour – an obvious human rights matter – may be considered ‘ordinary business’ for these retailers,” Julie Goodridge, CEO at Northstar told RI.

“Last year, shareholders at TJX and Home Depot supported these two proposals with 37% and 30% votes in favor respectively, indicating a clear interest in the companies addressing these issues”, Goodridge added.

“The SEC’s decision has squelched the voices of concerned stockholders.”

TJX is also seeking to exclude a proposal filed by Boston based SRI Trillium Asset Management on worker pay and inequality and another on the retailer’s lack of policy on animal cruelty, filed by Harrington Investments.

Food retailers meat resistance on antibiotics

As You Sow have filed a proposal at Walmart asking the US retail giant to report on the strength of its antibiotic standards in supply chains, particularly around meat.

Similar proposals at US retailer Costco and fast-food chain Wendys have been withdrawn by the non-profit following agreements being reached.

Moving to Australia

Next Friday (3 April), shareholders in Australian oil and gas giant Santos will vote on a climate lobbying proposal and another on disclosure of Paris-aligned targets covering scope one, two and three emissions. Both were filed by shareholder advocacy non-profit the Australian Centre for Corporate Responsibility. In response to the Coronavirus outbreak, Santos has revealed this week that it will hold the meeting virtually and that all votes on resolutions will be done via proxy.