Last year, investors filed a record-breaking 417 social and environmental shareholder resolutions — up from 365 in 2012 — with the majority addressing political spending and climate change, according to a report released today by As You Sow, the Sustainable Investments Institute (Si2) and Proxy Impact. Sustainability reporting, diversity and human rights also figure prominently in the rich mix of resolutions.
Last year, a growing number of shareholders demanded more transparency on companies’ political spending, with 30 percent of proposals reflecting that expectation. Others on climate change, energy and related risks — as well as sustainability reporting on strategy and performance — account for almost another 40 percent of all resolutions, roughly the same as the previous year. Socially conscious investors also made their feelings known in the areas of human rights (9 percent) and diversity of boards and in the workplace (11 percent).
Resolutions on climate change and environmental issues are the second largest category of proposals filed.
"There is a big increase in proposals asking companies to take more aggressive action to combat climate change," says Michael Passoff, CEO of Proxy Impact. "Investors are demanding greenhouse gas emissions reductions and disclosure. New carbon asset risk resolutions are asking companies if they are prepared to succeed in an increasingly carbon-constrained world, amid fears of stranded carbon assets and the potential of a carbon bubble. And the exploding shale energy business has intensified concerns about methane emissions, a far more potent greenhouse gas than carbon dioxide."
*Proxy Preview 2014 *provides a comprehensive overview of the 417 social and environmental shareholder resolutions. It also offers insider details from shareholder advocates and issue experts, as well as resources for how institutional investors with a social mission can better align their values with their votes, with a sharp eye on the financial bottom line.
Highlights of 2013 Shareholder Resolutions:
- Political Spending: More than 700,000 members of the public have told the SEC they want mandatory political spending disclosure and a continuing slew of proposals underscore this demand. Fully 30 percent of the resolutions covered in the report ask for more oversight and data on corporate spending on elections and lobbying; a few want companies to stop spending in elections altogether but the main theme is disclosure.
- **Environment and Sustainability:**While the climate change conversation increasingly is about stranded carbon assets, investors have filed more proposals than ever asking for carbon accounting, goal-setting, and risk assessments. Domestic shale energy expansion has also prompted new inquiries about methane emissions, alongside those about the use of hydraulic fracturing. Past issues such as sustainable palm oil and asking banks to consider GHG emissions in financing decisions are back as well.Other new questions about environmental issues include large-scale land acquisitions in the supply chains of food companies and related human rights problems. Dunkin’ Brands shareholders also may vote on whether the company should tell its donut buyers they are consuming nanomaterials, in a new twist. Further concerns relate to recycling, toxic materials, and global deforestation.
- Diversity: The country’s largest institutional investors are articulating the Thirty Percent Coalition’s demand for more diverse boards with more than a dozen proposals. Meanwhile, the growing acceptance of rights for lesbian, gay, bisexual, and transgender (LGBT) employees means there are a healthy number of resolutions about them this year.
- Human rights: Investors are pressing for corporate risk assessments regarding human rights and decent working conditions in the global supply chains for clothing companies, reputational and business risks following cooperation with government surveillance, and health information privacy in our digital age.
This is the 10th edition of the report hailed as the “Bible for socially progressive foundations, religious groups, pension funds, and tax-exempt organizations” by the Chicago Tribune. It is a collaboration between shareholder advocacy group As You Sow; Si2, which conducts impartial research on social and environmental shareholder proposals and emerging sustainability issues for institutional investors; and Proxy Impact, a proxy voting service designed specifically to meet the needs of foundations and socially responsible investors.