Investors gave unprecedented support to a wide range of social and environmental issues at US corporate annual general meetings (AGMs) in 2010, with the highest votes ever recorded. Two proposals received majority support, at Layne Christensen and Massey Energy, and 16 received more than 40% of the shares cast for and against. Data from the Sustainable Investments Institute (Si2), an independent non-profit environmental and social proxy research organization, launched in January 2010, shows unprecedented investor approval for corporate policies that protect lesbian, gay, bisexual and transgender (LGBT) rights, more reporting on sustainability in general and the environment in particular and increased disclosure of political spending. The highest scoring US AGM votes can be found at the foot of this article.
EEO and diversity: Investors gave the highest average level of support to 11 resolutions that asked companies to ensure their gay, lesbian, bisexual and transgendered employees’ rights are protected, giving these proposals 33% support on average, nearly cracking the 50% mark with a resolution from Calvert Investments at Gardner Denver.Sustainability reporting: Affirming a longstanding trend, proposals that asked companies to publish sustainability reports averaged just under 30% support. The proposals often had specific requests for climate change information and greenhouse gas emissions data and came to votes at 15 companies.
Political activity: More than one-quarter of investors, on average, voted in favor of resolutions that asked companies to disclose how and what they spend in the political arena. More than two-thirds of the 63 resolutions in this category were coordinated by the Center for Political Accountability, but a range of additional proposals addressed corporate political activity from different angles. Six proposals from conservative groups questioned companies’ lobbying activities and charitable giving to gay and lesbian groups, perennial proponent Evelyn Y. Davis had several proposals, and a few made it under the SEC radar to ask for more general lobbying disclosure.
Environment: Environmental proposals accounted for the largest share of proposals filed and voted on, addressing climate change, the politically incandescent topic of hydraulic fracturing and a wide range of other concerns. The May 19 annual meeting of Massey
Energy came just a few weeks after the Upper Big Branch mine disaster, which claimed the lives of more than two dozen miners; investors reacted by giving 53.1% support to a request for a climate change impact assessment. The resolution did not pass given the company’s voting requirement, however.
Human and labor rights: A significant proportion of KBR investors remains concerned about the company’s human rights record; shareholders gave a disclosure resolution on this subject from Mercy Investment 42.2% support. A similar resolution to Halliburton, which also raised concerns about incidents at the company’s operations in Iraq, earned just under 37% support. Other human and labor rights proposals addressed internet privacy and net neutrality (most of these were turned back at the SEC on the grounds that they raised “ordinary business” issues) and the ways in which companies can or should ensure human rights in the conflict ridden areas where they do business. A new proposal about payments to host governments from Oxfam America to Chevron earned just 7.1% support, and resolutions about the human right to water earned equally modest levels of support (just under 7%) at Ecolab and ExxonMobil. Only a few resolutions directly addressed supplier codes of conduct, in contrast to the recent past when sweatshopconcerns prompted dozens of such proposals. Half a dozen pay equity proposals from Interfaith Center on Corporate Responsibility members came to votes at financial firms, General Electric and two health care companies, but all earnedless than 10% support. Half of these two-dozen new proposals were withdrawn after discussions with companies.
Animal and agriculture: How animals are treated in industrial agricultural production has been a longstanding concern of animal rights activists, but investors remain wary of proposals that ask firms to alter their slaughter and egg production practices both in-house and at suppliers. Shareholders are equally skeptical of proposals about laboratory animal welfare, and gave relatively short shrift to three resolutions to Tyson Foods from religious investors about its production practices. All these resolutions received much less than 10% support, with an overall average of less than 5%.
Conservatives and climate change skeptics: The shareholder resolution arena remains dominated by liberal activists, and when conservative groups raise their concerns in proxy statements they get little affirmation from investors. About half a dozen proposals questioning climate change, political advocacy and charitable giving earned less than 5% support on average.
See following page for highest proxy votes of the US season.
Top Scoring Proposals of 2010
Company – Proposal – Proponent – Vote
Layne Christensen – publish sustainability report – Walden Asset Mgt – 60.3%
Massey Energy – report on climate change impact assessment – NYC pension funds – 53.1%
Gardner Denver – adopt GLBT nondiscrimination policy – Calvert – 49.1%
KBR – adopt GLBT nondiscrimination policy – NYC pension funds – 48.7%
Coventry Health Care – report on political contributions – NYC pension funds – 46%
Federal Realty Inv. Trust – publish sustainability report – LiUNA – 44.6%
Boston Properties – publish sustainability report – NYC pension funds – 44.1%
CMS Energy – report on coal combustion waste and risks – As You Sow – 43.1%*St. Jude Medical* – publish sustainability report – Walden Asset Mgt – 42.8%
KBR – report on human rights policy – Mercy Investment – 42.2%
Express Scripts – report on political contributions – Miami Firefighters – 42%
Williams Companies – report on hydraulic fracturing – Green Century – 41.8%
CVS Caremark – report on political contributions – Pax World Funds – 41.4%
Sprint Nextel – report on political contributions – NYC pension funds – 41.2%
MDU Resources Group – report on coal combustion waste and risks – As You Sow – 40.5%
Leggett & Platt – adopt GLBT nondiscrimination policy – NYC pension funds – 40.4%
Heidi Welsh is Executive Director of the Sustainable Investments Institute
Link to SII website for full US proxy season report.