Arjuna Capital ended 2021 on a high note, adding two more wins to its credit at the Microsoft...
2022, the absolute record year for ICCR members
More active than ever, ICCR members filed more than 500 proposals, won nearly 40 votes and secured more than 170 agreements with companies to improve their ESG practices during the most successful proxy season in their history.
Once again, members of the Interfaith Center on Corporate Responsibility (ICCR) have acted as a catalyst for change within North American corporations through proposals, dialogues and votes. Their efforts have resulted in improved disclosure and environmental, social and governance (ESG) practices for many companies in 2022, while creating pressure on their peers to follow their lead. In other words, each of their victories contributes to setting higher standards for ESG reporting and practices.
Of the 504 proposals submitted by ICCR members this year, 174 were withdrawn after satisfactory agreements were reached with the targeted companies, while 37 were supported by a majority of shareholders as of September 22, 2022. By comparison, in 2021, of the 307 proposals submitted, only 20 had achieved this feat, which was already a record for responsible investors.
In some cases, the victories won by ICCR members will allow shareholders to access more information about ESG issues. For example, Uber, Truist and AIG have agreed to increase their transparency regarding climate lobbying. For their part, Dollar General, Entergy, Eversource Energy, Martin Marietta and NiSource have committed to releasing data from their annual EEO-1 report, which includes the breakdown of their workforce by race, ethnicity and gender in 10 employment categories. In fact, thanks to pressure from responsible investors over the past few years, disclosure of this report has become a standard among S&P 100 companies, with more than 80% of them now making this valuable quantitative and comparable data public.
The successful efforts of ICCR members will also allow investors to benefit from the positive impact of improved ESG practices by a multitude of companies. For example, shareholders of AeroVironment, Celldex Therapeutics, Charles River Laboratories, DexCom, Iovance Therapeutics, Travelzoo and Yelp will be able to more easily nominate candidates for election to the board of directors in their companies' proxy statements (proxy access). For their part, Bank of America, Bristol-Myers Squibb, Chipotle Mexican Grill, and Goldman Sachs Group agreed to take into consideration the compensation levels and stock ownership incentives of all categories of employees when setting the CEO's compensation goals, in order to address inequities between the CEO's compensation and that of other employees.
On the environmental level, several agreements have been reached to intensify the fight against climate change, including improved management of direct methane emissions and the setting of greenhouse gas emission reduction targets. Gains have also been made in the fight against plastic pollution and programmed obsolescence. PepsiCo, Coca-Cola, CVS and Newell Brands, for example, have made commitments to reduce their use of plastics, while Alphabet and Apple will begin selling replacement parts, as well as manuals or repair kits, which could help extend the life of their devices.
Several shareholder initiatives focusing on corporate social practices have also been successful in 2022. TD Bank, Dow, Investco, Pfizer, Southern, State Street, Tyson Foods, and Verizon have agreed to the request of ICCR members to conduct a racial equity audit, which will ensure that they are not unwittingly contributing to systemic racism. Interestingly, there is a growing number of companies that are engaging in this exercise and demonstrating racial equity due diligence. What's more, shareholder proposals on this topic generally win high approval ratings, with some even achieving a majority vote in 2022, including those submitted to Apple and Johnson & Johnson. JPMorgan Chase and Morgan Stanley will examine the impact of binding arbitration on their employees and organizational culture, NVIDIA will issue a human rights policy, Thomson Reuters will conduct a human rights risk assessment of its products, and the Bank of Montreal will take steps to address the human rights risks associated with the financialization of housing.
Source: Interfaith Center on Corporate Responsibility, Catalyzing corporate change: 2022 Proxy Season Recap, September, 2022, ref. September 22, 2022, https://bit.ly/3S7xsUf